CPI Released, and It's Not What We Thought
The Consumer Price Index for July is out…and it’s actually lower than what many experts expected…
The CPI rate is finally pulling back from a 40 year high, as the numbers show we are now at
8.5% for July, down from June's 9.1%.
This is due to things like retail discounting, a decrease in commodity prices and a drop in gas
prices as COVID supply chain issues appear to be diminishing.
The CPI was flat from the prior month, coming after June's 1.3% jump. The core CPI rose 0.3%
from July, a big step down from June's 0.7% increase. The annual core inflation rate held at
5.9%. March's 6.5% core inflation rate was the highest since August 1982.
Experts expected the CPI to rise 0.2% in July, as the annual inflation rate eased to 8.7%.
Bitcoin jumped 2% and Ethereum 7% in the minutes after the report, signaling relief on the part of crypto traders that the Federal Reserve might be able to relax its aggressive approach.
Traders are now betting on a 65% chance that the Fed will hike interest rates by 50 basis points in September, compared with 32% just one day ago, according to the CME FedWatch Tool.
Recently, traders had been seeing a 75 basis-point hike as the likelier scenario after the jobs
report last week showed that the economy is still in very good shape. Several central bankers
have signaled that they will continue to tighten until they see inflation come down significantly...