CIBC Research discusses its reaction to today's US August CPI print.
"Core inflation was red hot in the US in August, giving the Fed the green light for at least a 75bp hike at its upcoming meeting. The 0.6% monthly advance in ex. food and energy prices was double the pace expected by the consensus and left annual core inflation at 6.3% (vs. 6.1% expected), a four tick acceleration from the prior reading. Shelter and medical care services were key contributors to price pressures in the core measure. Adding energy and food prices back into the mix showed a 0.1% monthly advance (vs. -0.1% expected), leaving the annual inflation rate at 8.3% (vs. 8.1% expected), as pressure in food prices more than offset the drop in gasoline prices, and energy service prices increased," CIBC notes.
"All told, with most categories except for energy commodities looking uglier, the Fed will no doubt be hiking by at least 75bp next week," CIBC adds.