August CPI Could Steer Fed Policy and U.S. Affordability

The August Consumer Price Index is expected to rise 0.4% month-over-month and 3.4% year-over-year, with core inflation at 0.2% from July. Traders see the CPI release as pivotal for the Fed’s September decision: a hotter print could justify a rate hike, while signs of disinflation keep policymakers’ options open. Oil at multi-month highs and gasoline around $4.27 a gallon add to household costs, and mortgage rates have climbed toward 7%, worsening affordability even as the labor market remains resilient. The data reflect conditions prior to the latest oil surge, so outcomes may hinge on Friday’s release and the Fed’s reaction to it.