Overview

• July headline inflation rose 0.2% month-over-month and 2.7% year-over-year while core CPI increased 0.3% m/m and 3.1% y/y, its largest monthly gain since January.
• Tariff-sensitive categories such as furniture, footwear and household wares recorded notable price jumps, though broad consumer pass-through remains uneven.
• A 0.2% rise in shelter costs drove much of the monthly CPI increase, highlighting continued pressure from core services prices.
• Futures traders on the CME FedWatch Tool boosted the odds of a quarter-point Fed rate cut in September to around 90% following the report.
• Goldman Sachs and UBS warn that delayed tariff effects are likely to accelerate through the autumn, posing upside risks to the Fed’s easing outlook.