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Inflation Data Last Hope for Fed Pause
11 Sep
Summary
- August consumer price index is the last chance to prevent a Fed rate hike.
- Rising oil prices near $100 a barrel make a Fed hold less likely.
- Oracle earnings and news on Iran's foreign minister meeting boosted markets.
The Federal Reserve's decision on interest rates next week may hinge on the August consumer price index (CPI) report, anticipated to be released at 8:30 a.m. ET. This data represents the last significant economic indicator that could persuade the central bank to hold off on another rate hike.
However, the path to a pause appears increasingly narrow as oil prices remain stubbornly close to $100 a barrel. For the Fed to refrain from raising rates, a notably tepid reading for core CPI inflation would be essential. This follows a recent producer price index report showing an uptick in hospital prices.
Despite these inflationary concerns, S&P 500 futures indicated a strong opening on Friday. This optimism was fueled by a favorable reception to Oracle's earnings report and a pullback in oil prices from above the $100 mark. News emerged that Iran's foreign minister is scheduled to meet with Gulf state counterparts, aiming to discuss the potential reopening of the Strait of Hormuz.
