Fed Expected to Cut Rates by 25 Basis Points After Inflation Data; Bitcoin Remains Stable
U.S. inflation came in as expected, increasing the likelihood of a 25 basis point Fed rate cut, with market expectations rising to 83%. A 50 basis point cut is now only 17% likely. The bond market now expects a 25 bps Fed rate cut this month, not 50 bps. The 2-year yield hit 3.69%, and the hashtag#Fed's held rates at 5.25%-5.5% since July 2023. Investors eye 140 bps in cuts by Jan '25. Source: Luc Sternberg, coinoptix, Bloomberg
The most important number of the day was US CPI number.
Inflation in August declined to its lowest level since February 2021, according to a Labor Department report Wednesday that also showed a key measure higher than expected, setting the stage for an expected quarter percentage point rate cut from the Federal Reserve. Indeed, while the headline CPI increased 0.2% for the month, in line with the Dow Jones consensus, the core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate. The slight uptick in core CPI keeps the Fed on defense against inflation, likely negating the probability of a more aggressive interest rate when policymakers meet next Tuesday and Wednesday. Here are the details: -> CPI 0.2% MoM (or 0.187% unrounded), Exp. 0.2% - in line -> CPI Core 0.3% MoM (or 0.281% unrounded), Exp. 0.2% - hotter than expected. Note that was the 51st straight month of MoM increases in Core CPI, and a new record high. The annual prints: -> CPI 2.5% YoY, Exp. 2.5% - in line. The annual CPI increase is the lowest since February 2021... -> CPI Core 3.2% YoY, Exp. 3.2% - in line Last, but not least, and perhaps most ominous of all, is that while the Fed is about to start cutting rates, Supercore CPI rose 0.33% MoM (see chart below), the biggest monthly increase since April, driven by continued acceleration in transportation services, which jumped the most in 5 months. Source: www.zerohedge.com, Bloomberg
US Presidential debate: Not all topics have been tackled...
Nothing about government spending. Nothing about national debt. Nothing about taxes. Meanwhile, the US debt clock is ticking... Source: Kurt Altrichter on X
$ALLY tumbled 17.5% yesterday as auto loan repayments see rising delinquency rates spook investors
More evidence that a growing portion of consumers are increasingly struggling. Source: Markets & Mayhem
🚨US BANKRUPTCIES ARE ON THE RISE🚨
The number of bankruptcy filings hit 452 year-to-date, the 2nd largest in 13 YEARS. In August alone, 63 companies went under, the 4th LARGEST since the COVID CRISIS. Most bankruptcies have been seen in the consumer discretionary sector. Source: Global Markets Investor
Harris is tonight's winner based on betting markets
Source: David Ingles, Bloomberg
In the US, Total credit card debt is at an all-time high while the personal savings rate is record low!
Source: www.zerohedge.com
Oil prices tumble to their lowest level since December 2021 on global growth worries.
Brent crude dropped <$70/bbl after the Saudi-led OPEC cut its growth projections for the world's appetite for oil. Source: HolgerZ, Bloomberg
