Released this morning, the Consumer Price Index (CPI) increased 0.2% in August and grew 2.7% on an annual basis, a bit lower than forecasts. The core rate, which excludes food and energy, increased 0.1% for August and grew 2.2% on an annual basis, also lower than expected. Apparel prices and medical costs were among the decliners, while energy prices, airline fares, and auto prices were among the increases. A slightly softer read on this inflationary measure adds a bit of additional support to the plan for measured rate increases by the Federal Reserve. Following the report, bond yields and the US dollar both moved a touch lower, while equity futures are higher heading into the market open.
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