Consumer prices rose 0.4% in August, as expected; core inflation was higher than estimated

Summary

Rick Santelli broke down the August CPI report, which showed headline CPI matching expectations at 0.4% month over month while core CPI rose a hotter-than-expected 0.3%. Core CPI year over year eased to 2.4%, the lowest of the year, while headline annual inflation was 3.4%. He also highlighted rising Treasury yields, with the 10-year yield near 4.96% and attention on whether it can break above 5%.

• August headline CPI rose 0.4% m/m, in line with expectations.
• Core CPI rose 0.3% m/m, one tenth hotter than expected.
• Headline CPI was 3.4% y/y; core CPI was 2.4% y/y, a new year low.
• CPI and core CPI indices set all-time highs.
• Real average hourly earnings fell 0.3% y/y; real weekly earnings rose 0.3%.
• Treasury yields rose on the week, with the 10-year near 4.96%.
• Market focus is on whether the 10-year yield can close above 5%.
• Upcoming Waller comments and University of Michigan data were noted.