Overview
- The Bureau of Labor Statistics’ August CPI report, released Friday, showed headline inflation up 3.4% year‑over‑year and 0.4% month‑over‑month with core CPI rising 2.4% annually and 0.3% monthly.
- Traders sharply raised odds of a 25 basis‑point Federal Reserve move next week to roughly 87–90% on the CME FedWatch tool and pushed the 10‑year Treasury yield toward 4.97–4.98%.
- Oil swung higher earlier in the week after renewed U.S.‑Iran tensions and a temporary Saudi pipeline pause and then cooled to about $100 a barrel, a pattern that fed both headline inflation and transport costs.
- U.S. stocks rallied about 1% on Friday as investors bought the dip, helped by strong tech earnings, even though higher yields and rate‑hike odds increase borrowing costs.
- Household pain is mounting: University of Michigan sentiment fell roughly 7.5%, mortgage rates and diesel prices hit recent highs, and political pressure rose as the White House floated large fiscal promises that could add to inflation risks.