US July CPI Seen Rising Moderately, Fed Rate Outlook in Focus
Gasoline prices fell and goods inflation stayed mild, with economists forecasting a 0.1% monthly CPI rebound and 2.5% core inflation.
- On Wednesday, the Bureau of Labor Statistics will release the July Consumer Price Index report, with economists forecasting a moderate rebound in inflation after June's decline. This data will shape Federal Reserve rate expectations.
- Last week's labor data showed nonfarm payrolls fell by 23,000 in July, though the unemployment rate declined to 4.1%. These mixed signals complicate the Fed's policy calculus amid persistent inflation concerns.
- Traders are pricing in a 50% chance of a September rate hike, down from 60% before the jobs report, according to the CME FedWatch Tool. RSM chief economist Joe Brusuelas suggested the committee may overlook supply shocks.
- Gold prices rose more than 1% on Wednesday, supported by easing expectations for Fed rate hikes next month. U.S. gold futures firmed 0.7% to $4,470.9, reflecting market participants' reaction to shifting rate bets.
- Policymakers will receive both July and August inflation data before making their next rate decision. Cleveland Fed President Beth Hammack said Monday that one quarter-point increase alone would have little effect on the economy.
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The Ibovespa is hovering around stability this Wednesday, after a sharp drop in the index the previous day, amid US inflation data in line with expectations. The numbers reinforce the prospect of the Federal Reserve (Fed) maintaining interest rates in September, instead of raising rates, and favor US stocks. Around 10:40 am, the Ibovespa was hovering around stability (-0.05%), at 167,794 points, after fluctuating between 167,142 points and 168,…
In the US, consumer inflation and core inflation declined in July, in line with market expectations. This drop, despite the pressure on energy supply and prices caused by the Iran conflict, came amidst discussions surrounding the Fed's interest rate policy in September.
The Upcoming Inflation Report Is a Big Deal for the Fed. Here's What Economists Expect.
The Dow Jones consensus forecast calls for headline CPI to rise 0.1% from June, while core CPI, which excludes volatile food and energy prices, is expected to increase 0.2%.
US consumer prices likely increased moderately in July as gasoline ...
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Bias Distribution
- 46% of the sources lean Right
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