Financial markets have responded with quiet but mild optimism to the newly published US inflation data for July. Following the release, bond yields dipped slightly, and the implied probability of a Fed interest rate hike this September experienced a minor decrease. This subdued reaction makes perfect sense, as the Consumer Price Index figures aligned exactly with broad consensus forecasts. Specifically, the headline CPI reached 3.4% YoY and saw a 0.1% MoM increase. At the same time, the core CPI climbed 2.5% YoY alongside a 0.2% MoM rise.

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