The closely watched Consumer Price Index was released this morning for August. While the headline number (all-items) came in as expected at +0.6%, the more Fed-focused core CPI (excluding food and energy) was 0.1% higher than expected; +0.3% versus +0.2% expected. Interest rates rose initially but have since fallen, see below:

Interest rates falling can likely be attributed to the trend in longer-term periods and the shelter sub-component. Looking back 3, 6, and 12 months; core and shelter inflation are making new post-peak lows and decelerating (i.e., 3mo is less-than 6mo. is less-than 12mo.) The Fed pays attention to this.