The July 2024 CPI data has been released by the Bureau of Labor Statistics today. The annual inflation rate in the US slowed for a fourth consecutive month to 2.9% in July 2024, the lowest since March 2021, compared to 3% in June and below forecasts of 3%. Compared to the previous month, the CPI increased 0.2%, rebounding from a 0.1% drop in June, and matching forecasts, with the index for shelter rising 0.4%, accounting for nearly 90 percent of the monthly increase.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis, after declining 0.1 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.

The index for all items less food and energy rose 0.2 percent in July, after rising 0.1 percent the preceding month.

The all items index rose 2.9 percent for the 12 months ending July, the smallest 12-month increase since March 2021.

The Federal Reserve must go big with a supersized 50 basis point interest rate cut in September to get ahead of a looming economic storm, warns the CEO of one of the world’s largest independent financial advisory and asset management organizations. ​

The warning from deVere Group’s Nigel Green comes as consumer prices in the US inched up modestly last month, adding fuel to the widespread expectations that the Fed will begin easing its grip on interest rates.

The latest figures from the Bureau of Labor Statistics showed a modest 0.2% rise in the consumer price index for July, including a ‘core’ measure that strips out volatile food and energy prices.

A quick glance at the inflation data from the previous month reveals a downward trend. The US annual inflation rate dipped to 3% in June 2024, marking the lowest point since June 2023. Additionally, contrary to forecasts of a 0.1% increase, the Consumer Price Index (CPI) in June unexpectedly dropped by 0.1% from the previous month, after remaining unchanged in May.

Concerns over a potential US recession are increasing, with a 40% chance of experiencing one.

The US Federal Reserve faces challenges in lowering interest rates by September if the July Consumer Price Index remains high and the US jobless rate increases, while a market surge is anticipated due to increased volatility.

Jerome Powell’s recent FOMC meeting confidence in inflation’s sustainable path to 2% suggests the Fed can focus on its second aim, aiming for maximum US employment.

The dismal jobs data, with unemployment at 4.3%, has led to speculation that Fed needs to aggressively drop interest rates to avoid a recession and achieve a soft landing, with market expectations of a 100 basis point decrease this year.