economy
An inflation report Wednesday should be a big deal for the Fed. Here's what to expect
The consumer price index is expected to show only a modest increase for July.
TL;DR
- The July consumer price index (CPI) report is expected to show modest increases of 0.1% for all items and 0.2% for core inflation.
- Annual inflation rates are projected to be 3.4% for all items and 2.5% for core, both down slightly from June.
- Two consecutive low monthly readings could encourage the Federal Open Market Committee (FOMC) to keep interest rates unchanged.
- Market expectations for a September rate hike have decreased to a 50-50 chance, with increased likelihood in October or December.
- Economists are divided, with some anticipating upside surprises in inflation data, while others believe the Fed will look past supply shocks if the data is near forecasts.
- Cleveland Fed President Beth Hammack indicated that multiple rate increases may be necessary to bring inflation down to target.