On Wednesday, the highlight of the week on the economic calendar is due with the release of the July CPI report.
Here's the consensus on the headline:
- +8.7% y/y
- +0.2% m/m
- +6.1% y/y
- +0.5% m/m
One of the measures that's increasingly popular is the Cleveland Fed's CPI nowcast. They're close to consensus with:
- +8.82% y/y
- +0.27% m/m
- +6.05% y/y
- +0.48% m/m
The other thing that people are watching are private sector reports. One is the Adobe Digital Price Index, which measures the prices of things online. It fell in July year-over-year data for the first time in two years.
Overall the market is certainly indicating that prices will fall but whether that settles at 2% or closer to 4% isn't going to be revealed in any data just yet.
But markets are prepared to move on whether the Fed goes 50 bps or 75 bps in September. Right now, the Fed funds futures market is priced 67.5% in favor of 75 bps.