US CPI: US Inflation for July Slips Below 3% for First Time Since 2021. Rate Cut Sealed?

The first dip under 3% in three years has investors even more convinced first cut to interest rates is coming in September.

• US inflation, as estimated by the consumer price index USCPI, eased to 2.9% in July from a year ago, in line with Wall Street expectations. The uplifting readout largely sums it up — the Federal Reserve should most likely have enough good data to make the call to cut interest rates at its mid-September meeting. The annual rise in consumer prices was below June’s rate of 3% but met consensus calls for 2.9%.
• While it may still be well above the Fed’s ideal 2% target, the July print boosts hopes of tamed price pressures — it is the first under-3% inflation rate since April 2021 when prices were just starting out on their journey toward a 40-year high of more than 9%. The US central bank, analysts say, should be content with the outcome. Officials have sought more proof that prices were coming down sustainably. What about markets?
• Initial reactions across the board: the EUR/USD pair jumped above $1.10 to hit a 2024 peak of $1.1035 and was on track to log the third straight day of gains. Futures contracts tied to the major stock averages were hugging the flatline with no big moves on the pre-market ticker tape. Gold was seesawing near unchanged levels around $2,470 and Bitcoin was floating near its daily pull of $61,000 a piece.