July Inflation Data Came in as Expected, Lowering the Odds of a Fed Hike in September Yet Again

July's inflation data came in line with expectations, with CPI rising 0.1% monthly and 3.4% year-over-year, while core CPI rose 0.2% monthly and 2.5% year-over-year. Combined with a weaker-than-expected jobs report, market odds of a Fed rate hike in September have declined to approximately 38%, down from 48%, with a 62% probability the Fed will hold rates steady in the 3.50%-3.75% range.