U.S. consumer prices moderate, though core inflation was unchanged in July

( )

The U.S. consumer price index (CPI) eased to 8.5% above year-ago in July, down from a 9.1% increase in June, as a decline in gasoline prices more than offset rises in food and other components. Despite the drop in gasoline prices during July, they were still 44.0% above year-ago, while the energy index was up 32.9%. The food index increased 1.1% in July – the seventh consecutive monthly increase of 0.9% or more – and jumped 10.9% over the past year, the largest 12-month increase since the period ending May 1979.

Core CPI, which excludes volatile food and energy prices, increased 5.9% versus last year, unchanged from June.

Traders slashed bets the Federal Reserve will deliver a third straight 75-basis-point interest rate increase in September following the bigger-than-expected slowdown in consumer inflation. Fed funds futures traders are now pricing in only a 38% chance the U.S. central bank will hike rates by 75 basis points when it meets in September, compared to 68% earlier. A 50-basis-point increase is now seen as a 62% probability.

Meanwhile, Bank of America thinks the U.S. yield curve could invert more deeply than at any time since the 1980s because of the Fed’s efforts to cool inflation. The two-year Treasury rate currently exceeds the 10-year by more than 40 basis points. The inversion, around the deepest since 2000, is viewed as a sign of a looming recession.

 

Latest News

After the Bell | April 26, 2024
After the Bell | April 26, 2024

After the Bell | April 26, 2024

Pro Farmer's Daily Advice Monitor
Pro Farmer's Daily Advice Monitor

Pro Farmer editors provide daily updates on advice, including if now is a good time to catch up on cash sales.

USDA updates dairy cattle H5N1 restrictions
USDA updates dairy cattle H5N1 restrictions

USDA’s Animal and Plant Health Inspection Service (APHIS) updated requirements for dairy cattle as follows:

Fed Inflation Gauge Not as Bad as Feared
Fed Inflation Gauge Not as Bad as Feared

Why corn producers will be pleased with coming House GOP farm bill proposals

Ahead of the Open | April 26, 2024
Ahead of the Open | April 26, 2024

Corn and wheat traded in narrow ranges near unchanged most of the night, while soybeans showed modest weakness.