# July CPI forecast 0.1% rise after June’s 0.4% drop

**Published:** 2026-08-12T05:14:52.941Z  
**Topic:** Inflation  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/f707efd6-6218-4856-9309-53363564d38d

July CPI expected to climb 0.1% month‑over‑month, 3.4% YoY, after June’s 0.4% dip – see how the bounce could shape Fed rate bets.

The consensus view is that the July Consumer Price Index will rise 0.1% from June, ending the latter’s 0.4% monthly decline and keeping annual inflation near 3.4% [1].

| At a glance | |
|---|---|
| July CPI MoM change | +0.1% (forecast) vs. -0.4% in June |
| July CPI YoY change | +3.4% (forecast) vs. +3.5% in June |
| Core CPI MoM change | +0.2% (forecast) vs. 0.0% in June |
| Core CPI YoY change | +2.5% (forecast) vs. +2.6% in June |

## Forecast versus prior readings  
FactSet’s consensus expects a modest 0.1% rise in headline CPI for July, reversing June’s 0.4% drop and leaving the year‑over‑year rate at 3.4%, a slight easing from June’s 3.5% [1]. Core CPI, which strips out food and energy, is projected to climb 0.2% month‑over‑month and 2.5% annually, compared with a flat month and 2.6% YoY in June [1]. These figures contrast with Kiplinger’s view that July inflation could near 4% by year‑end if oil price volatility persists [2].

## Market implications and Fed outlook  
The modest rebound is expected to keep the focus on the Federal Reserve’s next policy move. With the July jobs report already muddying the economic picture, analysts say the Fed will weigh the July and August CPI readings heavily when deciding whether to raise rates again this year [1]. CME Group’s FedWatch tool shows roughly an 80% chance of at least one rate hike before year‑end, though the odds of a September increase hover around 50‑50 [1]. Bond traders are therefore watching the CPI release for clues that could tilt the balance toward another quarter‑point hike or a hold.

## Drivers behind the forecast  
Economists cite an early‑July dip in gasoline prices, driven by a temporary easing of Iran‑related oil market tensions, as a key factor that should temper overall CPI growth [1]. Bank of America’s Stephen Juneau notes that while pump prices rose in the latter half of July, they remain lower than June’s levels, supporting a net 2‑3% decline in the CPI’s gas component [1]. Outside energy, core goods inflation is expected to stay subdued, but core services may rebound toward trend levels after June’s unusually large declines [1].

## What to watch
- **July 12 CPI release** (8:30 a.m. ET) – actual numbers will confirm or refute the consensus and could shift FedWatch odds.  
- **September FOMC meeting** – any deviation from the forecasted CPI could influence the likelihood of a rate hike.  
- **Oil price movements** – a sustained rise or further decline in gasoline prices will affect both headline and core CPI trajectories.

The July CPI will reveal whether the brief cooling in June was an anomaly or the start of a broader disinflation trend, and it will be a pivotal data point for markets gauging the Fed’s path to its 2% inflation target.

## Sources
1. Morningstar — [July CPI Expected to Bounce Back After Unexpected June...](https://www.morningstar.com/economy/july-cpi-expected-bounce-back-after-unexpected-june-inflation-decline)
2. Kiplinger — [What to Expect From the July CPI Report | Kiplinger](https://www.kiplinger.com/investing/economy/cpi-report-july-2026-what-to-expect)

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Cite as: TrendWatcher, "July CPI forecast 0.1% rise after June’s 0.4% drop", https://www.trendwatcher.in/article/f707efd6-6218-4856-9309-53363564d38d