Arabic version: تقرير مؤشر أسعار المستهلكين لشهر يوليو يختبر توقعات سياسة الاحتياطي الفيدرالي

According to Cnbc, the consumer price index report due Wednesday at 8:30 a.m. ET could give the Federal Reserve more room to assess inflation before deciding whether to raise interest rates. The Bureau of Labor Statistics release is expected to show a modest July increase, though annual inflation would remain above the Fed’s 2% target.

Dow Jones consensus estimates call for a 0.1% monthly gain in the headline CPI and a 0.2% rise in core CPI, which excludes food and energy. Annual rates are forecast at 3.4% for headline inflation and 2.5% for core inflation, each 0.1 percentage point lower than in June. Joe Brusuelas, chief economist at RSM, said a report near his forecast could leave the Federal Open Market Committee on hold for the rest of the year.

The Fed held its key borrowing rate at 3.5%-3.75% in a 9-3 July vote. Three dissenters favored a quarter-point increase, while Governor Lisa Cook has indicated she sees a need for hikes if inflation data does not cooperate. Traders see a 50-50 chance of an increase at the September meeting, with October or December viewed as more likely alternatives, according to CME’s FedWatch gauge.

Officials will be able to review both July and August inflation readings before their next meeting because the central bank does not meet in August. June brought a 0.4% monthly decline in headline inflation and a flat core reading, while nonfarm payrolls fell by 23,000 in July and unemployment dropped to 4.1%. Bank of America continues to expect three rate increases in coming months, saying inflation data remains central to the Fed’s policy response.