Inflation takes center stage this week, with Friday’s consumer price report expected to show prices rising 0.4% in August as oil prices climb again following two months of relief. The annual inflation rate is expected to hold at 3.4%, but there could be some better news underneath the headline: core prices are expected to rise just 0.2%, with the annual core inflation rate slowing to 2.4%.
The other major event comes from Europe, where the European Central Bank is expected to raise interest rates for the first time since 2023. Markets are looking for a quarter-point hike this week and are already pricing in two additional increases as persistent inflation keeps pressure on policymakers. Between Friday’s U.S. inflation report and the ECB’s expected return to rate hikes, inflation and central banks’ response to it will drive markets this week.
TUESDAY: Consumer inflation expectations
WEDNESDAY: 10-Year note auction
THURSDAY: Producer price index
FRIDAY: Consumer Sentiment