US CPI Report Poised to Shape Fed Rate Hike Bets

The upcoming US Consumer Price Index (CPI) report for July is expected to show a continued cooling of inflation, which could significantly influence the Federal Reserve's next policy move.

A consensus of economists forecasts a year-over-year increase of around 3.3% in the CPI report, down from 3.0% in June, and a month-over-month rise of 0.2%, still consistent with a disinflationary trend.

The core CPI, which excludes volatile food and energy prices, is forecast to rise by 4.8% annually, a modest deceleration from June's 4.9%

This trend could solidify the case for the Fed to hold rates steady in September, with some analysts predicting that the probability of a rate hike at the FOMC meeting has fallen to roughly 20%, down from nearly 40% a month ago.