With an important Federal Open Market Committee (FOMC) just about a month away, all eyes were on the recently released July inflation report.
The Consumer Price Index (CPI) rose 0.1% in July and was up 3.4% year over year, in line with economists’ estimates
Core CPI, which strips out more volatile food and energy prices, rose 0.2% in July, coming in 2.5% higher year over year. The core numbers were also in line with estimates. While the numbers are higher than the June inflation report, they are toward the lower end when looking back at inflation through the year.
Food prices rose 0.1% during July; energy rose 0.3%; and shelter rose 0.1%. Given the modest increase in inflation and other signs of slowing inflation, the market now sees an even lower chance than before the report that the Fed will raise interest rates at its September meeting. Image