US July CPI rose 0.1%, cooling annual inflation to 3.4%
Why it matters: The in-line report cut bets on a September Fed hike, with traders lowering the odds to about 42%.
US consumer prices rose 0.1% in July from June, while annual inflation eased to 3.4%, matching forecasts and reinforcing expectations that the Federal Reserve may hold rates steady next month. The Bureau of Labor Statistics said core CPI, which excludes food and energy, increased 0.2% on the month and 2.5% from a year earlier. Energy prices fell 1.5% in July after a 5.7% drop in June, helping offset continued pressure from housing, which rose 0.1% and accounted for about two-thirds of the monthly headline gain. Medical care climbed 0.4% and airline fares rose 2.2%. Stock futures moved higher and Treasury yields fell after the release as markets trimmed the chance of a September rate increase.