There’s a good chance that the Thursday morning CPI inflation report for July will show a small step backwards in the Fed’s battle against inflation.
Here’s the Wall Street consensus as of the end of last week according to FactSet:
All-items headline CPI month to month: +0.2% in July vs 0.2% in June.
Core CPI month to month: +0.2% in July vs 0.2% in June.
All-items CPI year over year: +3.3% annual rate in July vs 3% annual rate in June.
Core CPI year over year: +4.8% annual rate in July vs 4.8% annual rate in June.
I doubt that the actual numbers will move financial markets much–if they match consensus. (A miss one way or the other is, course, another matter)
A report that matches consensus is likely to move some sentiment off the current belief that the Federal Reserve will keep interest rates unchanged at its September 20 meeting. Today, August 8, the CME FedWatch tool puts the odds of the Fed standing pat at 86.5%
