July’s core CPI print above 0.2% MoM consensus may boost expectations for a September Fed rate hike.
The US Dollar remained mixed as traders awaited July’s Consumer Price Index data, which could sway Federal Reserve rate decisions. Conflicting signals from Middle East tensions and hawkish Fed rhetoric kept markets cautious, with a rangebound Dollar supporting carry trades.
Economists expect core CPI to rise 0.2% MoM, though a print of 0.3% or higher would strengthen bets for a September rate hike. Current Fed pricing shows a near-even split between a hike and a hold. Small business optimism also improved in July, reaching its highest level since August 2025.
A supportive risk backdrop and stable Dollar may sustain carry trade demand until the CPI release clarifies Fed policy direction.