US CPI Prep (12th August)

US CPI July Data Forecasts & Ranges
US CPI YoY Forecast 2.8%, Previous 2.7% Range 2.9% / 2.6%
US CPI MoM Forecast 0.2%, Previous 0.3% Range 0.3% / 0%
US Core CPI YoY Forecast 3%, Previous 2.9% Range 3.1% / 2.9%
US Core CPI MoM Forecast 0.3%, Previous 0.2% Range 0.4% / 0.2%

ANZ
We expect a tariff-induced rise in goods prices to result in core CPI inflation rising by 0.32% m/m in July. We will be watching core services ex-rent inflation closely to see if remains on a disinflationary track.

ING
Consensus is expecting another acceleration in core CPI, to 0.3% month-on-month (3.0% year-on-year), in this week’s July print. That is a number that can probably be seen as acceptable for the Federal Reserve to proceed with a September cut (90% priced in), given the backdrop of a significantly weaker jobs market. We forecast a 0.4% MoM core print, which would place greater emphasis on subsequent data and may limit further dovish repricing in the near term, though should not materially reverse September cut bets. From an FX perspective, we expect Tuesday’s print to give the dollar some short-lived support, which should wane once other data confirm jobs and activity slack.

Goldman Sachs
Our economists’ forecast of 33bp for core CPI seems unlikely to constrain the FOMC if the new trend in the labor market is confirmed and the unemployment rate rises. If anything, we think the inflation report could be a clearing event if it is close to our expectations and allows the market to focus on downside risks to the labor market and evolving Fed views into the upcoming Jackson Hole symposium.
Markets appear to need another catalyst, likely a softer US CPI print, to comfortably reengage in Dollar downside after the stop outs in recent weeks. That said, a firmer inflation print should not be enough to change the Dollar trajectory over time. But it may be sufficient to reduce the appetite for immediate participation and take longer for short USD/JPY to begin to “work.”

Morgan Stanley
We expect core CPI to rise 0.32% m/m in July (3.04% y/y), up from 0.23% in June. The acceleration is primarily driven by core goods, as categories more exposed to tariffs continue to show signs of pass-through. Services remain relatively soft, moving sideways. Our base case remains that most of the tariff-related price effects will materialize over the summer. However, risks are tilted toward a more gradual and persistent upswing in monthly prints through year-end.
The question about the timing of tariff pass-through continues to be key. Economic models typically estimate the magnitude of price shifts due to tariffs, but not the timing or pace of those changes. As a result, pinpointing when the effects will show up in inflation data is challenging. We rely on high-frequency data and insights from our equity analysts, though separating signal from noise can be difficult.

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