According to ChainCatcher, Nick Timiraos, the "Federal Reserve mouthpiece," wrote that the July CPI data cleared the way for the Fed to start cutting interest rates at its next meeting.
With the labor market showing signs of potential weakness recently, the debate at the Fed's September meeting will focus on whether to cut rates by a traditional 25 basis points or a larger 50 basis points. Wednesday's inflation data did not resolve that debate. Instead, the debate is likely to hinge on labor market reports, including weekly initial jobless claims and the August nonfarm payrolls report, which will be released on September 6. Wednesday's inflation report was mild, but a strong rise in housing costs could temper enthusiasm for the data. However, Fed leaders have signaled that they are ready to start cutting rates next month, in part because inflation data for May and June were also much milder. (Jinshi)