045: Inflation Rise and Federal Reserve Reactions 09-13-23

In this episode, Megan discusses the latest Consumer Price Index report and its potential ripple effects on the equity markets. Our host, Megan Horneman, the Chief Investment Officer at Verdence Capital Advisors, breaks down the August report, detailing the significant inflation increase due to rising energy prices, with a particular focus on how the core level experienced a rise even when volatile oil and gas are excluded. Megan closely scrutinizes what this could mean for future inflation rates and the measures the Federal Reserve might take in response.

A potentially intriguing topic of discussion is the looming Federal Reserve meeting next week, and what implications this report might have on it. Will there be a pause or an adjustment in monetary policy? Megan will guide you through these intricate economic indicators, their far-reaching impacts, and the probable reactions from the Federal Reserve. For any questions and queries, Megan encourages listeners to reach out directly. Be sure to tune in to this episode to keep yourself updated with the latest market trends and movements.

Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors. We're coming to you today with our regular segment of Markets with Megan and we're going to talk about the much-anticipated Consumer Price Index report that we got for the month of August. This is the biggest inflation report that investors look at on a monthly basis and what we saw that on the headline level, which includes energy prices, it was a pretty big monthly jump. This is not surprising at all because we had anticipated, because of the big increase in energy and gasoline prices, that we would get a big jump in that on a monthly basis. But what the Fed's going to be just a little concerned about is the fact that the core level so that strips out all that volatile oil and gas that actually rose as well by one-tenth on the month. It came down from four-seven on a year-over-year basis to four-three. So that's good.

But again, the Fed is going to be watching these inflation indicators very closely because it's very easy to reignite inflation, especially when you have energy prices that are rising as much as they can. So with this the equity markets are absorbing the news relatively well. There's nothing in this report that suggests the Fed's going to do anything but probably stay on pause next week when they meet, and then it will assess the data as we get into a closer to their November meeting to see if any adjustments to monetary policy are needed. That's all we have today. If you have any questions or comments, please feel free to reach out to at podcast at verdence dot com. Thank you.