{"id":197669,"date":"2024-09-11T10:00:00","date_gmt":"2024-09-11T14:00:00","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/uncategorized\/dollar-treasury-yields-rise-as-small-caps-fall-august-inflation-crushes-odds-of-50-point-fed-rate-cut\/"},"modified":"2024-09-12T09:00:49","modified_gmt":"2024-09-12T09:00:49","slug":"dollar-treasury-yields-rise-as-small-caps-fall-august-inflation-crushes-odds-of-50-point-fed-rate-cut","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/securities\/macro\/dollar-treasury-yields-rise-as-small-caps-fall-august-inflation-crushes-odds-of-50-point-fed-rate-cut\/","title":{"rendered":"Dollar, Treasury Yields Rise As Small Caps Fall: August Inflation Crushes Odds Of 50-Point Fed Rate Cut"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">Zinger Key Points<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>U.S. inflation in August falls to 2.5%, its lowest since February 2021, but core inflation remains sticky at 3.2%.<\/li>\n\n\n\n<li>Odds of a 50-basis-point rate cut at the Sept. 18 FOMC meeting drop to 15%, down sharply from 34%, per CME FedWatch.<\/li>\n<\/ul>\n\n\n\n<p>U.S. inflation in August hit its lowest annual rate since February 2021 at 2.5%, falling from 2.9% in July and below the expected 2.6%, yet the underlying story&nbsp;<a href=\"https:\/\/www.benzinga.com\/economics\/macro-economic-events\/24\/09\/40812986\/inflation-slows-to-2-5-in-august-lowest-rate-since-february-2021-core-index-remai\" target=\"_blank\" rel=\"noreferrer noopener\">tells a more complicated tale.<\/a><\/p>\n\n\n\n<p>Stripping out volatile food and energy prices, core inflation pressures remain stubborn at 3.2% as shelter costs surged at their fastest monthly pace since January 2024, fueling gains in the dollar and sending Treasury yields climbing.<\/p>\n\n\n\n<p>Expectations for a hefty 50-basis-point rate cut at the Sept. 18 FOMC meeting plummeted to just 15%, down from 34% a day earlier, as per CME Group\u2019s FedWatch tool.<\/p>\n\n\n\n<p>Traders now increasingly anticipate a more measured 25-basis-point cut, as sticky core inflation\u2014particularly in services\u2014remains a key factor under close watch by the Fed.<\/p>\n\n\n\n<p>Energy goods and services indices saw notable monthly drops, helping to ease overall price pressures. Gasoline prices fell 0.6% month-over-month in August after holding steady in July, while electricity declined 0.7% and utility bills for piped gas services dropped 1.9%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Market Reactions<\/h2>\n\n\n\n<p>The mixed August inflation report and the corresponding drop in investor expectation for a larger rate cut by the Federal Reserve at the September meeting triggered the following reactions in major assets:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The S&amp;P 500 opened Wednesday\u2019s session 0.2% lower.<\/li>\n\n\n\n<li>Tech stocks\u00a0were flat.<\/li>\n\n\n\n<li>Small caps sunk 1%.<\/li>\n\n\n\n<li>Gold prices fell by 0.4%.<\/li>\n\n\n\n<li><strong>Bitcoin<\/strong>&nbsp;fell 2%.<\/li>\n<\/ul>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted September 11, 2024 &#8211; <a href=\"https:\/\/www.benzinga.com\/markets\/equities\/24\/09\/40815234\/dollar-treasury-yields-rise-as-small-caps-fall-august-inflation-crushes-odds-of-50-point-fed-rat\">Dollar, Treasury Yields Rise As Small Caps Fall: August Inflation Crushes Odds Of 50-Point Fed Rate Cut<\/a><br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>U.S. inflation in August falls to 2.5%, its lowest since February 2021, but core inflation remains sticky at 3.2%.<\/p>\n","protected":false},"author":1128,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[146,147,8,12,148,7],"tags":[],"contributors-categories":[407],"class_list":{"0":"post-197669","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Dollar, Treasury Yields Rise As Small Caps Fall: August Inflation Crushes Odds Of 50-Point Fed Rate Cut<\/title>\n<meta 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