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2w ago

Markets Price In September Fed Cut as Core Inflation Rises, Trump Extends Trade Truce and Overhauls BLS

A 3.1% rise in core costs has lifted odds of a September rate cut to nearly 90% despite headline CPI matching forecasts.

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German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 17, 2025. REUTERS/Wolfgang Rattay/ File Photo
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Overview

  • The Labor Department reported that July’s Consumer Price Index rose 0.2% month-over-month and 2.7% year-over-year, while core inflation accelerated to 3.1%.
  • Fed funds futures surged after the data, pushing the probability of a Federal Reserve rate cut in September above 90%.
  • President Trump signed an executive order extending the 90-day U.S.-China tariff truce to November 10, averting the return of triple-digit duties.
  • A U.S. official told Reuters that Nvidia and AMD agreed to hand over 15% of advanced chip revenues from sales to China in a novel revenue-sharing deal.
  • Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer and nominated E. J. Antoni to lead the agency, prompting fresh concerns about data impartiality.