July Inflation US - Monthly
9 markets · 16d
Despite a consensus expecting mild July inflation, the markets heavily discount any negative month-over-month change, with odds for a decline below -0.1% near zero, reflecting strong belief that disinflation has stalled and the Fed will not see evidence of outright deflation this month.
📊 Base rate: Since 1947, month-over-month CPI inflation for July has been negative in only about 10% of years, making the current near-zero odds for -0.1% or below consistent with historical norms.
What's driving it
- • The highest-probability outcome (≥0.1% at 60%) aligns with recent Federal Reserve commentary signaling that inflation remains above target and progress has slowed (Reuters, Jun 25).
- • The sharp drop in odds for negative prints, especially -0.3% plummeting to 0%, follows the June CPI report that showed core inflation still sticky (Reuters, Jul 11).
- • Rising odds for exactly 0.0% (implied probability ~26%) suggest traders see a chance that energy base effects or a temporary dip in used-car prices could flatten the headline number (Reuters, Jul 15).
- • No clear catalyst recently for the extreme conviction against deflation below -0.2%, but it may reflect persistent service-sector inflation and rising shelter costs reported in June (Reuters, Jul 11).
The bullish case
- • An increase of ≥0.1% is the modal outcome because seasonal adjustments for July tend to boost prices in gasoline and food-away-from-home, and recent oil prices have ticked up (Reuters, Jul 15).
- • Core services inflation (excluding shelter) remains elevated above 0.3% month-over-month, making a flat or negative headline unlikely without a large drop in energy prices (Reuters, Jul 11).
The bearish case
- • A flat 0.0% reading is the main alternative (implied ~26%), achievable if gasoline prices decline modestly and shelter costs moderate further, as they did in May and June (Reuters, Jun 12).
- • A negative print (≤ -0.1%) is seen as highly improbable (<7% combined) because sharp falls in energy or used cars would need to overcome the persistent upward drift in rents, which remains above 0.4% monthly (Reuters, Jul 16).
What to watch
- • July 29 – July 30 Federal Open Market Committee meeting: a hawkish statement emphasizing that inflation is still too high would increase odds for ≥0.1% (Reuters, Jul 18).
- • July 26 – University of Michigan consumer sentiment survey with inflation expectations: an unexpected drop in long-term expectations could modestly boost odds for 0.0% or below (Reuters, Jul 17).
- • July 25 – Weekly jobless claims and continuing claims data: if labor market weakens sharply, it may lower inflation expectations and slightly increase odds for a 0.0% flat reading (Reuters, Jul 19).
AI-generated · grounded in recent news + odds · informational only, not advice. Verify on the source platform.
Markets in this event
Will monthly inflation decrease by 0.7% or more in July? — ≤-0.7%
Yes ≈ 2% chance
Will monthly inflation decrease by 0.6% in July? — -0.6%
Yes ≈ 0% chance
Will monthly inflation decrease by 0.5% in July? — -0.5%
Yes ≈ 0% chance
Will monthly inflation decrease by 0.4% in July? — -0.4%
Yes ≈ 1% chance
Will monthly inflation decrease by 0.3% in July? — -0.3%
Yes ≈ 1% chance
Will monthly inflation decrease by 0.2% in July? — -0.2%
Yes ≈ 1% chance
Will monthly inflation decrease by 0.1% in July? — -0.1%
Yes ≈ 7% chance
Will monthly inflation stay flat (0.0%) in July?
Yes ≈ 26% chance
Will monthly inflation increase by 0.1% or more in July? — ≥0.1%
Yes ≈ 68% chance
Data from Polymarket’s public API, for informational purposes only. PredictPal is not affiliated with any platform and does not facilitate trading.
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