Next week's Fed meeting unchanged by CPI: IG North America CEO

The S&P 500 (^GSPC) turned red Wednesday morning after the release of August's Consumer Price Index (CPI) report, as investors digest the inflation figures.

IG North America CEO JJ Kinahan joins Morning Brief hosts Brad Smith and Seana Smith to discuss the August inflation print and how it could affect the Federal Reserve's policy decision next week.

"I don't think it really changes their [Fed officials] assessment of things" Kinahan said, adding that "it seems that the market has already basically built in the fact that they're going to take 25 basis points."

Kinahan indicated the August CPI report didn't give "any clarity one way or the other" about potential rate cuts, but noted that "one thing that does stand out to me on there, however, is that the core prices for food and energy really didn't move" which is "one area where the average person would really like to see things move."

"We may see the energy prices next month come down as we have seen crude oil (CL=F, BZ=F) sell off quite a bit over the last week or so," where Kinahan thinks "we need to see things start to come down before it truly helps the economy."

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Naomi Buchanan.

Video transcript

Time.

Now for today's strategy session, us stocks fluctuating at the open as traders.

I just, today's CP I print showing a surprise acceleration in consumer prices, at least on a core basis.

Joining us.

Now we want to bring in JJ Kinahan.

He's IG North America's CEO and JJ.

When you take a look at the stocks reaction, we're not too far from the flat line, but I'm curious what your first take is of this inflation print and maybe what it tells us about what we'll likely hear from Powell and team next week.

Well, II, I don't think it really changes their, uh you know, assessment of things.

It seems that the market has already basically built in Shaun of the fact that they are gonna take 25 basis points.

Uh I think those who have been talking for 50 basis points or a certainty around, you know, three or four rate cuts before the Well, I guess it would have to be three for the end of the year that I think is still a little bit perhaps overstretched.

And so, you know, this, this was a bit of uh I don't want to say nothing burger, but it kind of was in the fact that I don't think it gives us any clarity one way or the other.

The one thing that does stand out to me on there, however, is that the core prices for food and energy really didn't move.

And I think that that's one area where the average person would really like.

I like to see things move.

Now, we may see the energy prices next month come down as we have seen crude oil, as you know, and report on every day, crude oil sell off quite a bit over the last uh week or so.

And so that may just be a delay in how, you know, timing of the survey or whatever it may be.

So there, I think is where we need to see things start to come down before it truly helps the economy.