July CPI came in exactly as expected—no surprises.
Headline inflation: 3.4% YoY (matching consensus)
Core inflation: 2.5% YoY (also in line)
Month-over-month, we saw a modest 0.1% uptick in headline and 0.2% in core.
The steady cooling from June's 3.5% to 3.4% suggests the disinflationary trend is intact, but not accelerating. Markets were braced for this—no shock, no drama. Just confirmation that the Fed's restrictive stance is working, albeit slowly.
With core at 2.5%, we're inching closer to the 2% target, but still not close enough to declare victory. The Fed will likely stay patient, keeping rates higher for longer until they see more convincing evidence.
For now, this print keeps September rate cut hopes alive, but doesn't force the Fed's hand.
Headline inflation: 3.4% YoY (matching consensus)
Core inflation: 2.5% YoY (also in line)
Month-over-month, we saw a modest 0.1% uptick in headline and 0.2% in core.
The steady cooling from June's 3.5% to 3.4% suggests the disinflationary trend is intact, but not accelerating. Markets were braced for this—no shock, no drama. Just confirmation that the Fed's restrictive stance is working, albeit slowly.
With core at 2.5%, we're inching closer to the 2% target, but still not close enough to declare victory. The Fed will likely stay patient, keeping rates higher for longer until they see more convincing evidence.
For now, this print keeps September rate cut hopes alive, but doesn't force the Fed's hand.