Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news and analysis.

Good afternoon. Today is Wednesday, September 11th, and I'm your host Kim Kahn. Our top story so far.

Retail inflation hit its lowest level in three and a half years, but a slightly higher measure of prices ex-food and energy

further entrenched the markets believe that the

Fed will be cautious when it cuts rates next week. The Consumer Price Index was 0.2%

in August, matching estimates and bring the annual rate down to 2.5%, a level not seen since February 2021.

The year on year rise matched expectations and came down from 2.9% in July.

But the core CPI were 0.3% a little hotter than the 0.2% rise forecast.

The annual core rate stayed steady at 3.2%.

Shelter was, once again, a main factor in the increase, rising 0.5% in August.

Airline fares bucked the recent trend and jump 3.9%.

Pantheon Macro says,

The August pickup in the core index was driven by components that have a much smaller

weight in the core PCE deflater, the Fed's preferred inflation gauge, or which are sourced from the

PPI.

Treasury yields erase losses after the report with a twos tense curve nearly flat.

Odds of the FOMC cutting by 25 basis points in the September meeting versus 50 basis points

jumped to 85% from 70% ahead of the print.

Fed Funds futures are now pricing in three rate cuts by the end of the year, down from four.

Economist Joseph Rossellis says the sticky service sector inflation and persistent

housing inflation in my estimation are consistent with the 25 basis point

cut by the Fed. One would imagine that Powell would face a challenge getting a

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