AUGUST 18, 2025 – JULY CPI HOLDS STEADY AT 2.7 PERCENT
July’s Consumer Price Index came in at an annualized 2.7 percent, the same as recorded in June, and below market expectations for a 2.8 percent increase. Core CPI (excluding food and energy) rose by 0.3 percent for the month, or 3.1 percent for the year. Forecasts were for 0.3 percent and 3.0 percent. The monthly rise in the core rate was the greatest since January.
Tariffs started showing in certain areas, but categories where import duties should be apparent showed no change. Shelter costs drove the rise, while food and new car prices were flat and energy prices fell.
Following the release of the report, traders feel a 25 basis point cut in September is more likely, as the Fed will focus on the poor employment numbers for now. Odds also rose from 62 percent to 67 percent chance of a further cut in October.