US July Core CPI Rises 0.2%, Easing Pressure on Fed

• US July CPI was in line with forecasts: headline +0.1% M/M, +3.4% Y/Y; core +0.2% M/M, +2.5% Y/Y (matching slowest pace since March 2021).
• Food at home and energy prices (including gasoline) decreased, while owner's equivalent rent rose 0.3% M/M, accounting for two-thirds of the overall core increase.
• Market reaction included slight gains in S&P and Nasdaq futures and declining bond yields, as the in-line print marginally reduced the probability of a September Fed rate hike.

The US July CPI report showed headline inflation rising 0.1% month-over-month and 3.4% year-over-year, while core CPI rose 0.2% month-over-month and 2.5% year-over-year. These figures were largely in line with expectations, easing pressure on the Federal Reserve for aggressive rate hikes and leading to positive market reactions in futures and bond yields.