US Inflation Fell to 2.5% Last Month

US inflation fell to 2.5% in August, setting the stage for the Federal Reserve to consider cutting interest rates at its meeting next week.

That is down from inflation of 2.9% in July and slightly below the 2.6% forecast of economists polled by Reuters.

The core consumer price index (CPI), which excludes more volatile food and energy prices, held steady at 3.2%, according to the Bureau of Labor Statistics.

This inflation data is one of the last important economic indicators before the Federal Reserve’s September 18 meeting, at which a decision could be made on a potential rate cut.

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Current interest rates, which range from 5.25 percent to 5.5 percent, are at a 23-year high. Lower inflation signals progress toward the Fed’s goal of bringing it closer to 2%, which could justify a rate cut.

In response to the inflation data, two-year Treasury yields, which reflect interest rate expectations, rose to 3.69%. Meanwhile, futures on the S&P 500 and Nasdaq 100 fell 0.5% after the report.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.