US CPI Data to Guide Fed Rate Hikes Amid Inflation Uncertainty

The US CPI data release on Wednesday is expected to provide fresh clues on the Federal Reserve's interest rate path, following weaker-than-expected jobs data and mixed policy signals from central bank officials.

Economists surveyed by Dow Jones expect headline inflation to rise 0.1% month-on-month, while core inflation, which excludes volatile food and energy prices, is projected to increase 0.2%. On an annual basis, headline inflation is forecast to ease to 3.4% from 3.5% in June, while core inflation is expected to slow to 2.5% from 2.6%

Vanguard economist Adam Schickling said that inflation continues to move in the right direction and is trending closer to the Fed's 2% target.

Financial markets have already begun repositioning ahead of the data release, with investors currently viewing October or December as more likely windows for any further tightening if inflation remains elevated