Breaking: US CPI Inflation Stays at 2.7% in July, Below Expectations

US CPI Misses Expectations, Stays at 2.7% in July

Inflation in the United States remained unchanged in July, with the Consumer Price Index (CPI) coming in at 2.7% year-over-year, slightly below the 2.8% consensus forecast. The data was released by the US Bureau of Labor Statistics on Tuesday.

On a monthly basis, the CPI rose by 0.2%, aligning with expectations, while the Core CPI, which excludes food and energy, increased 0.3% month-over-month, also in line with predictions.

However, the Core CPI year-over-year came in at 3.1%, slightly above the forecast of 3.0%, and up from 2.9% in June, showing that underlying price pressures remain persistent despite overall disinflationary trends.

“While headline inflation is stable, the uptick in core CPI shows that sticky components are still a concern for the Fed,” analysts noted.

Market Reaction: Dollar Edges Lower on Softer Headline CPI

In immediate reaction to the data, the US Dollar Index (DXY) slipped 0.15% to 98.35, reflecting a mildly dovish market interpretation. The lower-than-expected headline inflation number may reinforce expectations of a Federal Reserve rate cut in September, especially after soft labor data earlier this month.

Bond yields dipped slightly, while equity futures edged higher as risk sentiment improved. Traders now look ahead to upcoming Fed commentary for more direction.