"In Line" CPI & Higher Jobless Claims "Solidify" September FOMC Rate Cut

Inflation Data - The Consumer Price Index (CPI) month-over-month increased by 0.4%, which is a tenth better than expected, while the year-over-year CPI rose to 2.9%, up 210 basis points from last month but in line with expectations [1][2] - Core CPI month-over-month was up 0.3%, remaining unchanged year-over-year at 3.1%, consistent with expectations [2][3] - Key contributors to the monthly increase included airline fares (up 5.9%), used cars and trucks (up 1%), and apparel (up 0.5%), while medical care, recreation, and communications saw declines [3][4] Jobless Claims - First-time jobless claims rose to 263,000, marking the highest level in four years and an increase of 27,000 from the previous month, indicating a concerning trend in the labor market [5][6] - The rise in jobless claims suggests a potential increase in layoffs, which could influence Federal Reserve policy regarding interest rates [6][7] Market Reactions - The combination of inflation data and rising jobless claims has kept the 10-year yield in a tight range, hovering just above 4% [8][9] - The market appears optimistic, with stocks performing well, as the CPI data did not present any major shocks, and the weak labor market data may lead to future rate cuts by the Federal Reserve [10][11]