Why the CPI spooked markets on Tuesday
The red-hot CPI spooked markets on Tuesday.
The persistence of rising inflation has put the Fed on an aggressive path of rate hikes, cementing the prospect of a sharp hike, with 75 basis points or even 100 basis points announced at its meeting next week.
Meanwhile, gasoline prices fell 10.6% in August, the biggest monthly drop in more than two years. However, it has little effect on pulling down the CPI, and the core CPI data hit record highs.
Quiz of Today
When the CPI is too high, be alert to the risk of ______.
A. Deflation
B. Inflation
C. Deflation and inflation
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