© Reuters
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Investing.com – Core and core (inflation) consumer price data rose, above expert expectations, sending the market into violent turmoil as it rallied violently after the data and all under-commodities prime, riskier assets and foreign currencies such as.
The market decline is linked to the strength of the dollar, the expectations of the Federal Reserve, which awaits the next meeting on 21 September, and the expectations on interest rates by the end of the year.
Expectations
Immediately after the disappointing data was released, expectations of a 100 basis point hike in interest rates emerged, after expectations had been limited to a 50 and 75 basis point hike just prior to this data.
Before the data, 91% of experts believed the Fed would raise interest rates by 75 basis points to reach 300-325 levels, while only 9% believed the increase would be 50 basis points to record. 275-300 in total.
However, the disastrous data has put an end to all hopes for a 50 basis point hike to change expectations, and 80% of experts tend to raise interest rates by the Fed by 75 basis points, while 20% believe the Fed will take a more violent option and raise interest rates by 100 basis points.
Inflation data …
Looking at the details of the inflation data, we find that energy and food prices were the highest.
Year-on-year CPI rose 8.3% in August, while experts predicted a slowdown in the increase to 8.1% and Credit Suisse experts predict a 7.9% increase, down from to the 8.5% increase in the previous July reading.
As for the month of August, the core CPI was up 0.1%, while experts were expecting a drop of -0.1%.
The core consumer price index grew 6.3% yoy for August, while experts predict a 6.1% rise, up from 5.9% in July, due to of rising house prices.
Conversely, it increased by 0.6%, while experts had expected a 0.3% increase, equal to its increase since July.
data
Real income figures fell 0.1% and in the previous July reading increased 0.8% after the revision.
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