July CPI Report Sets Stage for Fed Rate Decision Showdown

The July Consumer Price Index (CPI) report is set to hit markets on Wednesday morning, and Wall Street is divided over what it might mean for the Federal Reserve's rate decision in September.

A soft print could lift stocks, bonds, and cryptocurrency prices together, while a hot one could corner new Fed Chair Kevin Warsh and revive rate-hike bets.

According to CME FedWatch data, there is a 50.1% chance the Fed holds rates steady in September, while a 49.9% chance it hikes them. This is as close to a dead heat as markets get, with hike bets dropping from near 58% just one week ago.

Forecasters expect a mild report, with a Wall Street Journal survey of 15 banks putting July headline inflation at 0.12%, or 3.4% year-over-year.