This Consumer Price Index (CPI) offered welcome progress, reflecting the lowest rate of yearly inflation since March of 2021. Prices rose 0.2% month over month (m\/m) and 2.5% year over year (y\/y) in August, in-line with projections on the former and 10 basis points (bps) lighter on the latter. Core stickers, which exclude food and energy due to their volatile characteristics, increased 0.3% m\/m and 3.2% y\/y, 10 bps heavier on the monthly figure and exactly as anticipated for the yearly result. In comparison, July\u2019s result came in at 0.2% m\/m and 2.9% y\/y for headline and 0.2% m\/m and 3.2% y\/y for core.<\/p>\n\n\n\n Looking under the hood, outcomes were mixed across categories. Driving costs to the upside were transportation services, shelter, food at dining establishments and apparel, which saw charges climb 0.9%, 0.5%, 0.3% and 0.3%. Meanwhile, used automobiles, energy services (heating & electricity), gasoline and medical care services experienced m\/m declines of 1%, 0.9%, 0.6% and 0.1%. New cars and food at the market were unchanged during the period.<\/p>\n\n\n\n Markets are reacting negatively to the data with stocks sinking while yields and the dollar rise. All major US equity indices are dropping and the rate-sensitive areas are suffering the most. The Dow Jones Industrial, Russell 2000, S&P 500 and Nasdaq Composite are lower by 1.2%, 1%, 0.8% and 0.3%. Sectoral breadth is negative with every segment losing on the session being led by financials, energy and real estate which are all lower by 1.8%. Treasurys are being sold modestly, with the 2- and 10-year maturities changing hands at 3.62% and 3.64%, 2 bps heavier on the shorter-end and unchanged on the longer. The greenback is up 6 bps as it appreciates versus the euro, pound sterling, franc and Aussie and Canadian dollars but depreciates against the yen and yuan. What\u2019s most concerning from a currency perspective is that the yen is now stronger than it was during the early August carry trade selloff. It reached 140.70 this morning against its US counterpart, much firmer than the 141.68 that it reached on August 5. Commodities are moving higher for the most part, with lumber, copper and crude oil up 4.4%, 0.5% and 0.3%, but gold and silver are lower by 0.5% each. Lumber is up sharply on the back of Vice President Kamala Harris’ odds jumping sharply following last night\u2019s debate as well as this morning\u2019s unexpected jump in shelter costs. Homebuilders are positioning for the continuation of substantial immigration flows and further upside for home prices and rents by scooping up the vital construction material.<\/p>\n\n\n\n![\"Consumer](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/09\/CPI-YoY-9-11-24.png\")
<\/figure>\n\n\n\nTransportation and Shelter Lead Price Pressures<\/strong><\/h2>\n\n\n\n
![\"Consumer](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/09\/CPI-MoM-9-11-24.png\")
<\/figure>\n\n\n\nStocks Selloff but Lumber Jumps<\/strong><\/h2>\n\n\n\n
Shelter is a Huge Deal<\/strong><\/h2>\n\n\n\n
![\"Consumer](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/09\/CPI-Shelter-9-11-24.png\")
<\/figure>\n\n\n\n