CPI hasn’t sprung any surprises, and pressure for September rate hikes has eased a bit
The U.S. July CPI finally came out: year-over-year came in at 3.4%, slightly down from June’s 3.5%; month-over-month rose 0.1%, basically in line with expectations. Core CPI also fell to 2.5% year-over-year.
After the data, market expectations for another rate hike in September cooled noticeably. The big picture still leans toward keeping rates unchanged in September, but the market has still priced in about a 38% probability of a rate hike.
I think this set of data is relatively comfortable for the market. Employment has already started to cool, and inflation hasn’t reignited either. For assets like U.S. stocks and gold, at least in the short term, there’s one major source of pressure gone.
Of course, 3.4% is still far from the Fed’s 2% target, so it’s still too early to talk about rate cuts. But the necessity of another hike in September is definitely getting lower.
# Will there be another rate hike in September after the July CPI met expectations? $SNDKB $MUB $SPCXB
The U.S. July CPI finally came out: year-over-year came in at 3.4%, slightly down from June’s 3.5%; month-over-month rose 0.1%, basically in line with expectations. Core CPI also fell to 2.5% year-over-year.
After the data, market expectations for another rate hike in September cooled noticeably. The big picture still leans toward keeping rates unchanged in September, but the market has still priced in about a 38% probability of a rate hike.
I think this set of data is relatively comfortable for the market. Employment has already started to cool, and inflation hasn’t reignited either. For assets like U.S. stocks and gold, at least in the short term, there’s one major source of pressure gone.
Of course, 3.4% is still far from the Fed’s 2% target, so it’s still too early to talk about rate cuts. But the necessity of another hike in September is definitely getting lower.
# Will there be another rate hike in September after the July CPI met expectations? $SNDKB $MUB $SPCXB