US consumer price inflation at the headline level eased to a 2.5% year-over-year pace in August, the slowest in 3-1/2 years. Core CPI, however, remained sticky at 3.2%, unchanged from the previous month. “This isn’t the CPI report the market wanted to see. With core inflation coming in higher than expected, the Fed’s path to a 50 basis point cut has become more complicated,” says Seema Shah, chief global strategist at Principal Asset Management. Sarah House, senior economist at Wells Fargo, advises: “Inflation continues to decelerate on tend, but we’re seeing it take longer for some of the impact of the pandemic to fully unwind.”
