Dow Jones Index Falls ⁢Over 400 Points Amid ​Fears of Fed Interest Rate Cut

The Dow Jones ​Index plummeted by over 400 points today, ‌September 11, 2024, following the release ‌of⁤ the Consumer Price Index (CPI), ‍which came in lower than expected. This development has⁤ led to speculation that the Federal Reserve (Fed) will likely cut interest rates by only 0.25% at its upcoming meeting next week.

As of 8:43 ⁤pm Thai time, the Dow Jones Industrial ‍Average stood at 40,320.36 ⁣points, marking a decline of 416.60 points or 1.02%.

The market also faced pressure from the rebound in US government bond yields, which followed the release of the CPI index.

Fed Interest Rate Cut⁤ Predictions

Analysts predict⁣ that the Fed will cut interest rates by only 0.25% next week, citing the lower-than-expected CPI index​ as a key factor.⁢ This ‌development reduces the urgency for the Fed to implement a more significant rate cut of 0.50%.

“The CPI numbers suggest‌ a rate⁤ cut of just 0.25%⁣ this month, reducing⁢ the need for a more substantial cut of 0.50%,” said Pimco analysts.

Investors are increasingly confident that the Fed will opt for‌ a 0.25% interest rate cut next week, following the release of the CPI index.

FedWatch Tool ​Indicates Investor Sentiment

CME ⁣Group’s latest FedWatch Tool reveals that investors are ⁤placing significant pressure on the Fed to cut interest rates by 0.25% to 5.00-5.25% at the September 18 ⁣meeting, with 85% of investors backing this prediction.

In contrast, only 15% of investors believe the Fed​ will cut interest rates by 0.50% to 4.75-5.00% ‍at the same meeting.

Consumer Price Index (CPI) Report

The US Department​ of Labor released the Consumer Price Index (CPI)⁤ report⁤ for August, ⁢which ​measures inflation in‍ consumer spending.

The headline CPI, including food and energy categories, increased by ‍2.5% year-over-year in August, falling short of analysts’ expectations of 2.6%⁢ after⁣ rising 2.9% in July.

On a monthly‍ basis, the⁣ headline‌ CPI rose 0.2% in August, in line with analysts’ expectations, from 0.2% in ​July.

The Core ⁢CPI,⁢ excluding food and energy, increased by 3.2% year-over-year in August, meeting analyst forecasts of 3.2% in July.

On a monthly basis, the Core CPI rose 0.3% ⁣in August, beating ⁤analysts’ expectations of⁤ 0.2% from 0.2%⁣ in July.