This is now a labor data-first Fed, not an inflation data-first Fed
The US Consumer Price Index for July indicated a slight easing in inflation, with both core and headline figures coming in below expectations.
Energy prices remained largely stable during the month, with no significant change in gasoline and electricity costs. Gasoline prices dropped by approximately 2% compared to July of the previous year, while electricity prices saw a 4.9% year-over-year increase. The tempered growth in energy and food prices has contributed to the annual CPI inflation rate's decline to 2.9%, marking the first time since March 2021 that the figure has fallen below 3%.
Wells Fargo economists added:"Today's data leave the FOMC in a holding pattern and do not settle the 25 bps or 50 bps debate for September."
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