US inflation holds steady at 2.7% in July
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The news: US inflation held at 2.7% in July, at odds with expectations that Trump’s tariffs would drive a more distinct acceleration.
The numbers: Tuesday’s annual consumer price index (CPI) was in line with June’s reading and below Bloomberg analyst’s expectations of 2.8%.
Core CPI, which strips out food and energy costs, accelerated to 3.1%, up from 2.9% as of June. Economists had projected a rate of 3%.
Futures pricing on Tuesday morning US time suggests traders are now seeing a 91% chance that the Fed will cut rates at its next meeting in September, the WSJ reports, up from 86% Monday. The chance of three quarter-percentage-point cuts by the end of the year climbed from 45% to 53%.
The context: The data from the Bureau of Labor Statistics (BoLS) follows Trump’s sacking of the agency’s chief earlier this month, after a BoLS jobs report signalled a sharp slowdown over the summer. Trump announced on Monday that EJ Antoni, a right wing loyalist from the Heritage Foundation would take over as chief of the agency.
Meanwhile, US small business optimism rose through July, after data from the National Federation of Independent Business said on Tuesday its Small Business Optimism Index rebounded 1.7 points to 100.3 last month, with some viewing business conditions as better and reporting that it is a good time to expand.
