U.S. CPI Expected to Post First Monthly Decline in Over a Year, Easing Rate Hike Concerns

According to analyst Matthew Weller cited by Jin10, traders and economists expect the U.S. CPI monthly rate to record its first negative growth in over a year on July 14. Energy prices have fallen sharply following the partial reopening of the Strait of Hormuz in late June, while the lagging effects of the Trump administration's previous tariffs have largely been absorbed by markets.

Federal funds futures currently price in a 35% probability of a Fed rate hike at this month's meeting. Fed Chair Waller is scheduled to appear before congressional hearings this week, and an unexpectedly favorable CPI report combined with his testimony could trigger significant market volatility amid ongoing uncertainty.