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CPI Forecast Summary (as of August 12, 2025)
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Headline CPI (U.S.) is expected to climb 0.2% month-over-month, bringing the year-over-year inflation rate to around 2.8%.
Core CPI, which excludes the more volatile food and energy sectors, is projected to rise 0.3% m/m, potentially lifting the annual rate to 3.0–3.1%, its strongest gain in months.
This increase in core inflation is likely tied to rising import costs—especially for goods affected by tariffs (e.g., furniture, apparel, vehicle parts, toys).
There are growing concerns about the quality of CPI data, as resource cuts and staffing changes within the Bureau of Labor Statistics (BLS) have led to data collection disruptions and higher reliance on imputations.
What This Could Mean
If CPI comes in as expected, remaining moderately elevated, markets still expect that the Federal Reserve might begin interest rate cuts in September, given that inflation hasn’t overheated.
If inflation surprises higher, particularly due to tariffs, that could delay rate cuts and weigh on market sentiment.
Conversely, a cooler-than-expected reading might signal weakening demand and could prompt speculation about a larger-than-anticipated rate cut.
Quick Recap
MetricExpected m/mExpected YoYHeadline CPI+0.2%~2.8%Core CPI+0.3%~3.0–3.1%
With that, markets are bracing for volatility once the full July CPI figures drop later today. Let me know if you’d like insights into international CPI trends or how this might affect specific sectors like energy, housing, or equities!