Uncertain July CPI Puts Spotlight on Crucial Upcoming Data | Presented by CME Group

[Music] On August 12th, we saw the latest CPI data and it had mixed results. So, the headline came in below expectations at 2.7%. But core CPI, excluding food and energy, was higher than anticipated at 3.1%. Markets seemed to focus on the headline number as equities rallied and 2-year yields dropped. This release drew

intense scrutiny due to the weak unemployment data that was reported back on August 1st. A deteriorating labor market typically signals disinflation, but persistent inflation had raised concerns about external factors like tariffs, which chairman Powell has flagged as a potential driver. So just before the CPI release, Fed funds futures had priced in an 82% chance of a

25 basis point cut at the September 17th FOMC meeting. Post release, that probability surged past 90% with the markets pricing in 60 basis points of easing by the end of 2025. So on August 14th, we'll see the PPI data and then on the 15th, we'll see retail sales. Together, these numbers should give us a

clearer picture as to the Fed's coming moves. [Music]