TechFlow news, on August 14, according to Jinshi Data, the U.S. core CPI rebounded as expected in July. Although the overall trend indicates cooling inflation, it hasn't altered market expectations for a Fed rate cut in September. Market expectations for a September rate cut are currently split between 25 and 50 basis points. However, economists note that a 50-basis-point cut would require a significant deterioration in the labor market. Recently released weak PPI data lowered market expectations for CPI, making the current CPI reading somewhat disappointing.
Win Thin, Head of Global Markets Strategy at BBH, said it's too early to draw conclusions, but price movements suggest the market had anticipated a lower CPI print than the actual result. Overall, the data shows inflation is decelerating, but price growth has not halted. The market now sees a smaller chance of a 50-basis-point cut next month, which is why short-term bond yields have risen.
