July Sees 0.2% Increase in U.S. Consumer Price Index, in Line with Forecasts
In July, inflation in the United States unfolded largely as expected, positioning the Federal Reserve for potential rate cuts at its upcoming mid-September meeting.
According to a report from the U.S. government released on Wednesday, the Consumer Price Index (CPI) increased by 0.2% in July. This uptick contrasts with a 0.1% decrease in June and aligns with the anticipated 0.2% rise. On an annual basis, the CPI saw a 2.9% increase, slightly below the 3% projection and the 3% figure recorded in June.
The core CPI, which excludes volatile food and energy prices, rose by 0.2% in July, in line with expectations. This growth follows a 0.1% increase in June. Year-over-year, the core CPI stood at 3.2%, slightly lower than the forecasted 3.2% and the 3.3% seen in June.
Bitcoin (BTC) prices continued to climb modestly to $61,200 following the release of the inflation report.
Before the data release, market speculation centered on whether the Federal Reserve would adjust its benchmark fed funds rate range at the next meeting. According to CME FedWatch, a tool that assesses probabilities based on market positions, the likelihood of a rate cut was high. The tool indicated a 52.5% probability of a 50 basis point rate reduction compared to a 47.5% chance of a 25 basis point adjustment.
The recent inflation report is not expected to significantly alter these forecasts. The upcoming U.S. economic calendar includes reports on initial jobless claims and retail sales. Additionally, the Federal Reserve’s Jackson Hole symposium is on the horizon, a platform where past Fed chairs have used to introduce or discuss significant policy changes.
