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US CPI Holds at 2.7% Amid Rising Core Inflation, Tightening Fed Rate Cut Expectations
US CPI Holds at 2.7% Amid Rising Core Inflation, Tightening Fed Rate Cut Expectations
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BTCCSquare news:
July's inflation data delivered a mixed signal for markets. Headline CPI remained stable at 2.7% year-over-year, but the Core measure—stripped of volatile food and energy components—jumped 3.1%, marking its steepest climb in five months. This divergence puts the Federal Reserve in a delicate position as traders now price in an 82% probability of September rate cuts.
Tariff impacts are beginning to Ripple through consumer prices. What began as corporate absorption of trade war costs is transitioning to retail price hikes, with Goldman Sachs projecting consumer-facing tariff effects to triple by October as inventory buffers deplete. The Fed's preferred inflation gauge continues to run hot despite stable headline figures.
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