US inflation eased to 3.4%, cutting bets on a September Fed hike
What's next: Traders cut the odds of a September rate increase to 40% and shifted focus to producer-price data later Thursday.
US consumer inflation cooled in July, easing immediate pressure on the Federal Reserve to raise interest rates next month and rippling across currencies, gold and global stocks. Consumer prices rose 3.4% from a year earlier, down from 3.5% in June, while the monthly increase was 0.1%, in line with expectations. After the data, markets reduced the implied chance of a September rate hike to 40% from about 54% a week earlier, according to CME FedWatch. Gold held near a two-month high, the dollar drifted and investors turned to the producer price index for more evidence on whether price pressures are moderating. The inflation report landed as oil remains elevated because of the Iran war and disruptions around the Strait of Hormuz.