U.S. post-CPI remains at 2.7% but inflation rises sharply: details first appeared on Coinpedia Fintech News
The latest U.S. inflation numbers have come out, and markets are watching closely. Overall inflation remained stable in July, but core prices, which matter most to the Federal Reserve, are rising.
This has put a rate cut in September firmly in focus, even as tariff-driven price pressures start to bite.
Here’s what you need to know.
CPI data summary
The Consumer Price Index (CPI) rose 0.2% in July from the previous month, matching forecasts and down from 0.3% in June. Year-over-year, inflation stood at 2.7%, just below the expected 2.8% and the same as in June.
The most pronounced movement was in core CPI, which excludes food and energy. It rose 0.3% in July and is now 3.1% higher than a year ago, the largest increase in five months and above market expectations.
Tariffs begin to affect consumers
President Trump's global tariffs are raising costs for U.S. companies, and more of those costs are being passed on to buyers. Companies had been holding back prices earlier this year, waiting for clarity on trade policy. But with that picture clearer, many are raising prices.
Goldman Sachs says that only 22% of tariff costs were passed on to consumers initially, but that could rise to 67% by October as older, cheaper inventory is depleted.
Markets are betting on a rate cut in September
The CME FedWatch tool shows that traders see an 82% chance that the Federal Reserve will cut rates next month. Some expect more than two cuts before the end of the year.
But the Federal Reserve has a dilemma.
Inflation is proving to be persistent while the labor market shows signs of weakness. As Stuart Kaiser of Citi says, 'CPI could leave the Federal Reserve with dual headaches.'
Mohit Kumar of Jefferies adds that while weak labor data could force cuts, 'a picture of persistent inflation will prevent aggressive easing policy.'
Why do CPI data matter for cryptocurrencies?
CPI continues to show how quickly prices are rising for consumers and is one of the most important economic indicators for global markets. For cryptocurrency traders, the bets are simple:
Lower-than-expected CPI → higher chances that the U.S. Federal Reserve will cut interest rates sooner, making risk assets like Bitcoin more attractive.
Hotter-than-expected CPI → rates remain high for longer and cool speculative markets.
What's next?
The Producer Price Index (PPI) will be released later this week, followed by the Federal Reserve's Jackson Hole meeting at the end of August. Both could influence how aggressively the Federal Reserve moves in September.
For cryptocurrency traders, the path of interest rates in the U.S. will remain a key driver in the coming weeks.
