Will September CPI be above or below 3%?

Core Insights - The Federal Reserve is currently in a wait-and-see mode regarding interest rate cuts, having only reduced rates by a quarter percent once in September, with expectations for a second cut on October 29 [1][10] - The decision to implement further cuts will depend on the interplay between inflation and unemployment trends [2][3] - The upcoming Consumer Price Index (CPI) report for September is critical, with Wall Street estimating a CPI of 3.1%, which would be the highest since May 2024 [6][7] Economic Trends - The Fed's dual mandate of controlling inflation and maintaining low unemployment creates a balancing act, as raising rates can lead to higher unemployment while lowering rates can increase inflation [3] - Recent inflation trends have been concerning, particularly since the introduction of tariffs in April [4] - The CPI for August was reported at 2.9%, with previous months showing a gradual increase in inflation rates [9] Market Expectations - The CME's FedWatch tool indicates a 99% probability of a 0.25% rate cut in October, suggesting that the market has largely priced in this expectation [10] - A significant deviation from the consensus CPI estimate could influence the likelihood of another rate cut in December [11]