INSIGNIFICANT INFLATION

July CPI fell to 2.9%, its lowest level since 3/21, while the more important core measure hit 3.2%, its lowest since 4/21. Moreover, over the last three months core CPI is up 1.6% annualized, down from 2.1% in June. The major problem, housing. It was responsible for 90% of the CPI’s 2.9% Y-o-Y rise. Nonetheless, a 25bps September cut is guaranteed and maybe 50bps, or more likely 25bps in November.