The U.S. July CPI report did not change the Federal Reserve's expectation of a rate cut in September

The core CPI in the United States rebounded as expected in July, but the trend is consistent with cooling inflation and has not changed expectations for a Federal Reserve rate cut next month. The U.S. Bureau of Labor Statistics said on Wednesday that after falling 0.1% in June, the CPI rose 0.2% month-on-month in July and increased by 2.9% year-on-year. Due to rising borrowing costs cooling demand, the annual growth rate of CPI has significantly slowed from its peak. Although inflation remains high, it is moving towards the Fed's target of 2%. The options for a Fed rate cut in September are between 25 and 50 basis points; however, economists believe that there must be a significant deterioration in the labor market before the Fed can cut rates by 50 basis points.