US CPI inflation in July stood at 2.9 percent year-on-year(Y/Y). The indicator on an annual basis has fallen below 3 percent for the first time since March 2021. The market consensus was exactly 3 percent Y/Y. On a monthly basis, prices increased by 0.2 percent. The core inflation rate was 3.2 percent Y/Y.
Inflation is moving towards the target set by the Federal Reserve (FED). We also see signs of a turning point in the US labor market, where the unemployment rate unexpectedly rose to 4.3 percent. The combination of early signs of trouble in the job market and relatively low inflation is becoming a solid argument for initiating a cycle of cuts.
A decrease in September is practically a foregone conclusion. The question is not whether the cuts will begin, but at what scale. The base scenario is a cut of 25 basis points, but we also do not rule out a move of 50 basis points.
Bartosz Wałecki, Analyst at Michael / Ström Dom Maklerski.
Source: https://ceo.com.pl/inflacja-cpi-w-usa-ponizej-prognoz-64313
