Inflation on the Right Path: Insights From BlackRock's Gargi Chaudhuri

Inflation on the Right Path Amid Slight Stickiness

U.S. inflation remains on the right path despite core prices coming in slightly hotter than expected in August based on the latest reading of the consumer-price index, according to BlackRock’s chief investment and portfolio strategist for the Americas, Gargi Chaudhuri.

Potential Interest Rate Cuts on the Horizon

In her view, that sets up the Federal Reserve to potentially cut interest rates by a quarter-percentage point this month. While core inflation in August was stronger than anticipated on a month-over-month basis, the slight stickiness in services inflation supports a cut of just a quarter-percentage point at the Fed’s policy meeting next week, Chaudhuri said in emailed comments Wednesday.

Core CPI Data Alignment

The core CPI data, which removes the volatile food and energy components of inflation, were in line with Wall Street’s expectations on a year-over-year basis at 3.2%, she said. “The last three months' data confirms that inflation is on the right trajectory,” said Chaudhuri, which will allow policymakers at the Fed to shift their attention to potential weakening in the labor market.