U.S. Consumer Price Index for July Sees Modest Increase of 2.7%, while Core Rate Exceeds Expectations at 3.1%
Data reveal a mixed inflation report for July, with the core rate rising faster than anticipated, leaving markets awash in speculation about a Federal Reserve rate cut.
Key Insights:
- The year-over-year rise in the July Consumer Price Index (CPI) was 2.7%, which is lower than what many experts had predicted.
- In contrast, the core CPI experienced a sharper increase of 3.1%, surpassing expectations.
- Following this news, Bitcoin’s price saw a slight uptick, hovering just below $119,000.
In this article:
U.S. inflation data for July displayed a mixed bag of results, revealing that while overall headline figures met expectations, the core inflation rate escalated at a rate that was more robust than anticipated. The July CPI recorded a 0.2% increase as issued by the Bureau of Labor Statistics, aligning with forecasts yet lower than June’s increase of 0.3%.
The year-over-year CPI increased by 2.7%, marginally below the anticipated 2.8%, while core CPI, which excludes volatile food and energy prices, edged up by 0.3% on a month-to-month basis, matching predictions.
Market analysts expect that these figures will likely keep Federal Reserve interest rate adjustments on the table, with market expectations indicating an 84% probability of a rate cut in September. Following the report, this probability increased to 90%.
The response in traditional markets showed U.S. stock index futures rising, with both the Nasdaq 100 and S&P 500 indices up approximately 0.6%. Additionally, the U.S. dollar lost some value, with the 10-year Treasury yield dipping three basis points to 4.26%.
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