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Are you keeping up with the latest updates from the stock market, trading, and Wall Street? If not, you’re in the right place! Let’s dive into the recent developments that have been making waves in the financial world.

Consumer Price Index Meets Expectations

In July, the Consumer Price Index (CPI) showed a 0.2% monthly increase, which aligned perfectly with economists’ forecasts. The 12-month inflation rate came in at 2.9%, just slightly below the anticipated 3%. Core CPI, which excludes food and energy, also saw a 0.2% monthly increase and a 3.2% annual rise, meeting expectations. These figures indicate that inflationary pressures may be easing, potentially opening up the possibility for the Fed to consider adjustments to monetary policy.

Treasury Yields and Rate Cut Probabilities

Following the inflation data, U.S. Treasury yields experienced a slight uptick as investors processed the information. The CME FedWatch Tool now shows a 100% probability of a rate cut in September, with traders divided on whether it will be a 25 or 50 basis point reduction. This shift in expectations comes after Tuesday’s PPI data, which was softer than anticipated, showing a 0.1% monthly increase compared to the expected 0.2%.

Impact on Other Currencies

Meanwhile, sterling dipped after UK inflation data fell below expectations, causing it to rise by 0.2% to $1.28415. The weaker inflation numbers sparked speculation about potential rate cuts by the Bank of England, with financial markets now pricing in a 44% chance of a quarter-point cut in September, up from 36% prior to the data release.