Analyst: If August CPI data does not rise significantly, the Federal Reserve is expected to cut rates by 25 basis points.

ChainCatcher News, the US August CPI data will be released tonight at 20:30. The market is currently pricing in a 100% probability that the Federal Reserve will cut interest rates next Wednesday, especially after the unexpected decline in August producer prices and weak US employment growth. The only remaining questions are how much the rate cut will be, and how officials will respond to the possibility of further rate cuts this year if Thursday's CPI data comes in higher than expected. Meanwhile, companies are absorbing some of the tariff costs brought by the Trump administration's trade policies, which has somewhat eased inflationary pressures.

Economists expect that after factoring in a 0.3% month-on-month increase, the overall CPI for August will rise slightly year-on-year from 2.7% in July to 2.9%. The core CPI, which excludes food and energy, is expected to remain unchanged at 3.1% year-on-year and 0.3% month-on-month.

BeiChen Lin, Senior Strategist at Russell Investments, stated that it would take a "very significant" upside surprise to prevent the Federal Reserve from cutting rates by 25 basis points next week, but even mildly above-expectation data would be enough for officials to express concerns about future inflation risks while cutting rates. The "core services" category in the CPI report is particularly worth watching.