August 2024 CPI Expectations
The latest Consumer Price Index (CPI) report is expected to show softer results. Headline inflation is anticipated to decline, primarily driven by a fall in energy prices during the month. However, core CPI, is expected to remain unchanged.
Some developments during the month:
I am experimenting with a table format to show developments, please let me know if it looks bad, or is difficult to read, or how it can be improved
- Persistent wage growth, though at a slower pace than the 2023 growth rate.
- Rent prices remained on a negative Y/Y price trend, however, home prices continue with strong appreciation.
- Car prices continue to deflate, however used car prices have shown some signs of appreciation in recent months.
- Energy prices are currently on a significant decline, and it has gotten significantly worse during September.
- Food, PPI and import prices are all currently stable and more in line with pre-pandemic increases.
The market is currently pricing 25bps rate cuts in September 2024, with 125bps rate cuts for all 2024, and 250bps rate cuts as of September 2025.
For me, this is aggressive for a market that all thinks that a recession is not the most likely outcome.
