Energy prices pull back rapidly
Energy prices fell by 1.1% in July, which gives relief to headline inflation. Gasoline prices declined by 2.2%, leading to their 9.5% annual decline. Natural gas fell 0.9%, while the electricity decreased by 0.1% in a month, but is 5.5% more year-on-year. Energy weakness compensates for firmness to other CPI components.
The cost of the grocery costs the prices of food dip
Total food prices were unchanged in July. Food declined by 0.1%at home, which led to a sharp decline in eggs (-3.9%) and led by nonclocolic beverages (-0.5%). These declines increased the price of beef by 1.5%. Food away from home 0.3%, up to 0.5%with full-service food.
Market Outlook: Data slightly reduces the pressure
Cooling energy costs as well as soft-to-applied headline prints, can reduce some pressure on the Federal Reserve to maintain a Hawkish stance, especially with tariff-related cost risks on the horizon. However, the firmness of core inflation above 3% confirms the cautious accent of the fed.
Short -term view: Rapist for bonds, limited USD effects
Treasury can see light purchasing interest as traders accommodate a little cooler inflation profile. The dollar is likely to remain stable due to no decisive changes in the Fed Policy requirements. Equity markets can get nominal support, especially benefiting from low fuel costs in consumer and transport sectors, although tariffs may benefit from concerns.
More information in our economic calendar.
