US Inflation Steady as July CPI Report Matches Expectations

The US economy's inflation rate remained steady in July, according to the latest Consumer Price Index (CPI) report. The headline CPI rose 0.1% month over month and 3.4% year over year, both matching expectations.

Shelter costs continued to rise, with owners' equivalent rent and primary rents increasing by 0.3%. Medical care and airfares also saw increases, but energy prices fell 1.5% and gasoline dropped 2.9%, helping restrain headline inflation.

The report gave the Federal Reserve additional room to remain on hold in September, with the market-implied probability of a rate hike slipping to around 39% from 44% before the release.