Analyst: If the August CPI data does not rise significantly, the Federal Reserve is expected to cut interest rates by 25 basis points

ChainCatcher News, the U.S. August CPI data will be released tonight at 20:30. The market is currently pricing in a 100% chance of a rate cut by the Federal Reserve next Wednesday, especially after the unexpected decline in August producer prices and weak job growth in the U.S. The only question now is how much the rate cut will be, and how officials will respond to further rate cuts for the year if Thursday's CPI data exceeds expectations. Meanwhile, businesses are absorbing some of the tariff costs brought about by the Trump administration's trade policies, which has somewhat alleviated inflationary pressures.

Economists expect that after accounting for a month-on-month increase of 0.3%, the overall CPI for August will rise slightly from 2.7% in July to 2.9% year-on-year. The core CPI, excluding food and energy, is expected to remain unchanged at 3.1% year-on-year and 0.3% month-on-month.

BeiChen Lin, a senior strategist at Russell Investments, stated that a "very large" upside surprise would be needed to prevent the Federal Reserve from cutting rates by 25 basis points next week, but even moderate data exceeding expectations would be enough for officials to express concerns about future inflation risks while cutting rates. The "core services" category in the CPI report is worth paying close attention to.