US July Core CPI Rises 0.2%, Easing Pressure on Fed

Summary

The video covers the July US CPI report showing headline CPI at 2.5% YoY and core CPI up 0.2% MoM, both in line with expectations. The data eased pressure on the Fed to raise rates further. Market reaction was muted with modest equity futures gains, lower yields, and a slight reduction in September rate hike odds, while shelter costs remained a sticky component.

• Headline CPI rose 2.5% YoY, matching the slowest pace since March 2021.
• Core CPI increased 0.2% MoM, in line with forecasts.
• Energy, gas, and grocery prices all fell on the month.
• The in-line print marginally priced out some September rate hike probability.
• Treasury yields declined, with 30-year and 2-year yields moving lower.
• Equity futures ticked higher, with S&P and Nasdaq futures up modestly.
• Shelter costs accounted for two-thirds of the overall increase, remaining a key inflation driver.