📝 Looking For A U.S. August CPI Decline Of 0.2% M/m: Wells Fargo

We look for prices to have declined 0.2% last month, which would be the largest monthly drop since the spring of 2020. A further plunge in gasoline prices is expected to lead the headline lower, while additional giveback in travel services and used cars should help hold the core to a 0.4% month-over-month increase.

While we expect the FOMC to be encouraged by the downshift in inflation since June, core prices continue to advance well ahead of the Fed's target. However, still-strong rate of labor cost growth suggests that it will not be easy to return inflation to the Fed's target on a sustained basis.

- Wells Fargo Securities