Core Insights - Bloomberg Economic Research anticipates a significant rise in the core Consumer Price Index (CPI) for August, driven primarily by non-essential service expenditures such as airfare and hotel stays rather than tariffs [1] - The increase in these expenditures is ironically a result of the Trump administration's efforts to lower tariffs through various ceasefire agreements and trade deals, which in turn has led to a more accommodative financial environment [1] - The upcoming CPI report, in conjunction with the August Producer Price Index (PPI), suggests that the core Personal Consumption Expenditures (PCE) price index, favored by the Federal Reserve, may see a slight year-over-year increase to 3.0% [1] Market Expectations - The market widely expects the Federal Open Market Committee (FOMC) to announce a rate cut during its meeting on September 16-17 [1] - However, if inflation data comes in strong, the risk increases that this may be the only rate cut for the year [1]