U.S. July CPI Rose Softer Than Hoped 2.7%, but Core Rate of 3.1% Disappoints

U.S. inflation data for July came in mixed, with headline numbers better than forecast, but the core rate rising faster than expected.

The July U.S. Consumer Price Index rose 0.2%, according to the Bureau of Labor Statistics. Economist forecasts had been for 0.2% and June’s pace was 0.3%.

On a year-over-year basis, CPI was higher by 2.7% against 2.8% expected and 2.7% previously.

Core CPI, which excludes food and energy, rose 0.3% from the prior month, compared with forecasts for 0.3% and June’s 0.2% gain. On a yearly basis, core CPI increased 3.1%, versus expectations of 3% and June’s 2.9%.

The data likely isn’t far enough off from forecasts to lower expectations for a potential Federal Reserve interest rate cut as soon as September, with market-implied odds at 84% before the release, according to CME FedWatch. Fifteen minutes following the mixed numbers, those odds had risen to 90%.

Ahead of the report, bitcoin (BTC) was trading near $118,500, as traders hedged downside risks with short-dated put options. In the minutes after the release, BTC rose very modestly to just under $119,000.

A check of traditional markets finds U.S. stock index futures on the rise following the CPI, with the Nasdaq 100 and S&P 500 each ahead about 0.6%. The dollar has softened a bit and the 10-year U.S. Treasury yield dipped three basis points to 4.26%.

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