U.S. Inflation Drops in August

Inflation in the United States fell more than expected in August, a key figure for both the Federal Reserve, which is preparing to begin a cycle of interest rate cuts, and the electoral campaign between Democratic Vice President Kamala Harris and former Republican President Donald Trump.

The Consumer Price Index (CPI) dropped to 2.5% in the 12 months through August, down from 2.9% in July, according to the Department of Labor. This is the lowest figure since February 2021.

The August figure was below the average forecast by economists surveyed by Dow Jones Newswires and The Wall Street Journal.

Monthly inflation, meanwhile, rose by 0.2% after June's decline, in line with expectations.

For the market, the published data is good news. A rate cut by the U.S. central bank (the Fed) would boost demand in the economy by lowering the cost of credit.

In this context, Federal Reserve policymakers have shifted their focus from inflation to unemployment, to account for the bank's dual mandate of keeping prices in check and maintaining a strong labor market, and they have indicated that rate cuts are on the horizon.

Nota publicada originalmente en El Heraldo de México.