BREAKING: Prediction market implied odds of a 50 basis point interest rate cut drop to 8% after August CPI inflation data.
After CPI data was published, odds of a 50 basis point rate cut this month fell from 34% to 8%, according to Kalshi.
While year-over-year inflation fell to 2.5%, month-over-month inflation rose by 0.3%, more than expected.
Meanwhile, Core CPI inflation stands at 3.2% and is still well above the Fed's 2.0% target.
The fight against inflation is not over yet.
It is not the time for emergency rate cuts or 50 bps rate cuts.
Rather, the Fed should steadily reduce rates 25 bps at a time.
A meeting-by-meeting approach is needed.
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