Version 1 – Narrative Market Story
Hotter-than-expected U.S. inflation data rattled markets Thursday, but investors still see a Federal Reserve rate cut on the horizon.
The Consumer Price Index rose 0.4% in August, topping forecasts for 0.3% and outpacing July’s 0.2%. On a yearly basis, CPI climbed 2.9%, while core inflation held steady at 3.1%.
Bitcoin slipped 0.5% to $113,700, equities trimmed gains, and the dollar edged higher. Treasurys rallied, sending the 10-year yield down to 4.00%, and gold reversed losses to trade higher at $3,675 an ounce.
Adding to the complexity, weekly jobless claims spiked to 263,000 against expectations of 235,000, suggesting cracks in the labor market. With inflation sticky and employment softening, traders see a 25-basis-point rate cut next week as a near certainty, while the chance of a larger move has faded.
Version 2 – Policy & Outlook Focus
The Fed’s balancing act grew tougher on Thursday as inflation edged above forecasts while jobless claims signaled labor weakness.
CPI rose 0.4% in August, more than the 0.3% estimate, while annual inflation held at 2.9%. Core CPI was unchanged at 0.3% monthly and 3.1% yearly.
Markets responded cautiously. Bitcoin slipped, stocks gave back momentum, and the dollar firmed. Treasurys rallied sharply after jobless claims spiked to 263,000, well above expectations and the highest in months.
Futures markets now assign near-total probability to a 25-basis-point cut next week. Speculation of a 50-basis-point move, fueled by softer jobs and producer price data earlier in the week, has all but disappeared.
Version 3 – Condensed Newswire Style
- CPI: August +0.4% vs. +0.3% est; annual inflation 2.9%. Core CPI +0.3%, yearly 3.1%.
- Markets: Bitcoin -0.5% to $113,700; futures +0.1%; 10-year yield drops to 4.00%; gold rises to $3,675.
- Jobs: Initial claims jump to 263,000 vs. 235,000 expected.
- Fed outlook: Traders price in a 25 bp cut next week, larger cut unlikely.
