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13h ago

July CPI and U.S.-China Tariff Truce Bolster September Fed Cut Odds

Investor focus centers on next week’s PPI report after core inflation surprised markets, injecting uncertainty into the Fed’s rate path.

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The unemployment rate remained at 4.7 per cent
Euro 2024, in which England progressed to the final, provided a boost to Entain last year but the group said this year’s performance was even better

Overview

  • U.S. headline consumer prices rose 0.2% in July month-over-month and 2.7% year-over-year, matching forecasts and easing near-term inflation concerns.
  • Core CPI accelerated to approximately 3.1% year-over-year, prompting economists to warn that tariff pass-through may be lifting underlying price pressures.
  • President Trump signed a 90-day extension of the pause on higher tariffs for Chinese imports, deferring duty hikes until November 10 without resolving longer-term trade disputes.
  • U.S. equities rallied to record highs and global markets, led by Tokyo’s Nikkei, as Fed funds futures priced in more than a 90% probability of a September rate cut.
  • Investors are now eyeing upcoming Producer Price Index, retail sales and August jobs data to determine whether disinflation holds or core pressures persist.