Prediction markets indicate that July’s CPI report will show cooler inflation than expected, with traders on Kalshi assigning less than 55% probability that the reading exceeds 3.3% year-over-year. Economists polled by Dow Jones project headline inflation at 3.4% for July, down from 3.5% in June, when monthly CPI fell 0.4%, the largest monthly decline in over six years due to a temporary drop in energy prices. For core inflation excluding food and energy, traders see a 47% likelihood of a reading above 2.4%, compared to the Dow Jones consensus estimate of 2.5%. The Bureau of Labor Statistics will release the July CPI data on Wednesday morning, and the report will be a key factor in the Federal Reserve’s rate decisions at its September meeting.
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