PRICE PROGRESS

July CPI came in at 0.1% and core CPI 0.2%. This brought the Y-o-Y trend for CPI to 3.4%, from 3.5% last month, and core CPI to 2.5% from 2.6% last month. Better yet, three-month core CPI is at 1.6% annualized and 2.4% on a six-month basis. This report has reduced the chances of a September rate hike from 50% pre-data release to 40%. I expect absolutely no hike.