Investors anticipate a quarter-point rate cut from the Federal Reserve on Sept. 17, potentially sparking short-term volatility but fueling longer-term gains. The delicate economic backdrop is underscored by consumer prices rising 0.4% in August, pushing annual CPI to 2.9% and core CPI up 0.3%.

Producer prices also show inflationary pressure, with PPI up 2.6% from a year earlier and core PPI rising 2.8%. The labor market softens as nonfarm payrolls increase by only 22,000 in August, with revisions showing weaker job growth in June and July.

Bond markets reflect expectations of a Fed rate cut, with the 2-year Treasury yield at 3.56% and 10-year at 4.07%. Equities are testing record levels, with the S&P 500 closing at 6,584 and the Nasdaq Composite hitting five straight record highs.

Bitcoin trades at $115,234, while gold surges to $3,643 per ounce. Historical data suggests potential for longer-term gains post-rate cut, but short-term turbulence may occur. The Fed’s decision on growth, inflation, and policy outlook will shape markets in the coming months.

Read more at Yahoo Finance: Fed’s Sept. 17 Rate Cut Could Spark Short-Term Jitters but Supercharge Bitcoin, Gold and Stocks Long Term