Forecasters expect the U.S. CPI report, due to be released tonight at 20:30, to increase the likelihood of a rate cut by the Federal Reserve in September, as underlying inflation is expected to record the lowest month-on-month since last summer.

The median forecast in a foreign media survey estimates that core CPI inflation, excluding food and energy, will rise by only 0.2% for the second consecutive month in June. The broader overall CPI is expected to increase less, with a month-on-month increase of 0.1%, partly due to lower gasoline prices.

Such an outcome will help consolidate financial market expectations that the Federal Reserve will begin to cut interest rates at its September policy meeting, marking the first step to end the most aggressive tightening action since the early 1980s.

Foreign media economists Anna Wong, Chris Collins and Stuart Paul said that borrowing from Fed Chairman Powell's description of recent inflation data, the June CPI report is expected to be "very good", "laying the foundation for the Fed to start cutting interest rates in September."

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