Latest / Markets with Megan: A Quick Financial Markets Update / Will the Fed Flinch? CPI Reports Are In | S2E 077 | 09-11-25

Transcript

Will the Fed Flinch? CPI Reports Are In | S2E 077 | 09-11-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: We received the final inflation report before the big Fed meeting next week.
• 0:04
  Megan Horneman: It's Thursday, september the 11th, and this is Markets with Megan.
• 0:07
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• 0:09
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• 0:13
  Megan Horneman: We're here today to break down the economic data, as we always do, and what that means for the markets and as well as what it means for the upcoming Fed meeting next week.
• 0:22
  Megan Horneman: So this morning we received the August reading on the Consumer Price Index and this is the second report that we got this week.
• 0:29
  Megan Horneman: We got the Producer Price Index, which came in better than anticipated and at the consumer level there weren't any major surprises.
• 0:36
  Megan Horneman: But we wanna dig down into some of the other details that are worth mentioning and definitely worth monitoring.
• 0:42
  Megan Horneman: So at the headline level, the inflation rose four tenths of a percent.
• 0:47
  Megan Horneman: That will include food and energy, and that 0.4% was a little bit higher than expected of 0.3.
• 0:55
  Megan Horneman: Year over year inflation's rising 2.9%, versus 2.7% in the prior month.
• 1:01
  Megan Horneman: And then, when you exclude food and energy, that core reading, that's rising 3.1%.
• 1:05
  Megan Horneman: That came in line prior month.
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  Megan Horneman: And then, when you exclude food and energy, that core reading, that's rising 3.1%.
• 1:07
  Megan Horneman: That came in line with expectations and it matched last month's gain.
• 1:11
  Megan Horneman: Now let's look into where this inflation is coming from.
• 1:15
  Megan Horneman: The service sector still is showing sticky inflation pressures, rising 3.8% on a year-over-year basis.
• 1:22
  Megan Horneman: The housing sector specifically shelter that's up four tenths after a two-tenths rise last month, so again a little bit in the wrong direction.
• 1:32
  Megan Horneman: Airline fares they jumped almost 6% in August and that compares to a 4% rise the prior month.
• 1:39
  Megan Horneman: And then you saw used car and truck tick higher as well.
• 1:43
  Megan Horneman: Now the markets really like this reading.
• 1:46
  Megan Horneman: There's a 100% chance the Fed will cut rates 25% at their meeting next week.
• 1:52
  Megan Horneman: That's according to the futures market, and there's now basically three rate cuts scheduled for the remainder of this year.
• 1:59
  Megan Horneman: When you look at the futures market Now, what we're going to watch and what the Fed should be watching, is really digging into that super, super core level.
• 2:08
  Megan Horneman: So when you exclude food, energy and shelter, we're still seeing inflation pressures On a year-over-year basis that's rising 2.7% and that's the highest annual increase we've seen since June of 2023.
• 2:24
  Megan Horneman: So there is underlying inflation pressures that haven't completely disappeared.
• 2:29
  Megan Horneman: That's not going to change the Fed's opinion.
• 2:31
  Megan Horneman: We think they'll cut interest rates next week, but we really hope that they follow that with the fact that they continue to be data dependent and they'll watch this data.
• 2:40
  Megan Horneman: It's expected to be volatile as we move into the remainder of this year and that, in their inflation target, is not officially reached yet and in fact, could argue that it's moving slightly in the opposite direction.
• 2:52
  Megan Horneman: Now the markets are celebrating it.
• 2:54
  Megan Horneman: Today they're up big and that's because this rate cut is finally upon us and this is what the market's been anticipating.
• 3:00
  Megan Horneman: We'll be back next week when we get that Fed report as well as more information on the consumer.
• 3:07
  Megan Horneman: Thank you.
• 3:07
  Megan Horneman: If you want a history of this podcast, you can go to marketswithmeganfm.
• 3:10
  Megan Horneman: Thanks,