The U.S. July CPI data will be released tonight, possibly directly influencing the Federal Reserve's interest rate decision in September?
At 20:30 Beijing time, the U.S. Bureau of Labor Statistics (BLS) will announce the CPI data for July 2025. According to the latest data from Investing.com, the year-on-year forecast for July CPI is 2.8%, higher than June's 2.7%; while the year-on-year forecast for core CPI in July is 3.0%, higher than June's 2.9%.
By reviewing the inflation data from the past three months, a significant trend is that both the overall CPI and core CPI have consistently reported values below market expectations. If this trend continues, we have reason to infer that the data to be announced tonight may again meet or even fall below market's general expectations.
Analysts believe that the CPI data to be released tonight is highly anticipated, as it may affect the Federal Reserve's interest rate decision in September. According to the CME's “FedWatch” tool, the market currently expects an 85% probability that the Federal Reserve will lower rates by 25 basis points in September, which aligns with the public's expectations.
Analysts point out that if the CPI data released tonight meets or falls below expectations, it will strengthen market expectations for a rate cut in September, bringing positive effects to the financial markets. Conversely, if the CPI data exceeds expectations, it may delay the expectations for a rate cut in September, thereby suppressing the rebound of risk assets.
Matrixport's analysis report also confirms this viewpoint. The report indicates that if tonight's CPI data is higher than expected, it could affect the market's expectations for two rate cuts by the Federal Reserve this year. However, considering the current seasonal slowdown phase, Bitcoin (BTC) prices may rise slowly rather than surge.
Nevertheless, as the cryptocurrency market continues to attract capital inflows, the overall favorable industry trend suggests that long-term investors can expect significant growth in the asset value of their held cryptocurrencies this year.
Tonight at 20:30, the U.S. July CPI data will be revealed. Do you think the CPI data will be above or below expectations? How will this affect the Federal Reserve's interest rate decision in September? Leave your thoughts in the comments section!
