US July CPI seen up 0.1%, testing Fed rate path before September
What's next: Markets see only a roughly 50-50 chance of a September hike, with July and August inflation data due before the Fed meets again.
A closely watched US inflation report due Wednesday is expected to show only modest price gains in July, potentially giving the Federal Reserve more time before deciding whether to raise interest rates again. Economists surveyed by Dow Jones expect the consumer price index to rise 0.1% for the month and 3.4% from a year earlier, while core CPI, which strips out food and energy, is seen rising 0.2% on the month and 2.5% annually. The Fed held rates at 3.5% to 3.75% in a split 9-3 vote in July. Traders now see September as an even-odds meeting for another hike, with expectations shifting toward October or December.