ING Bank: If the core CPI rate for July is 0.3%, the Federal Reserve will have room for rate cuts in September.

The US CPI data for July will be released on August 12 at 20:30. If the data shows a cooling of inflation, it could solidify expectations of a rate cut by the Federal Reserve in September. However, if there are signs that Trump's tariffs are exacerbating price increases, the Fed may temporarily keep rates unchanged. Francesco Pesole, a forex strategist at ING, says that ahead of tomorrow's data release, it is important to note that the threshold for a hawkish surprise from the Fed has increased. Given the deterioration in the labor market, if the core CPI monthly rate records 0.3% as expected, it will provide room for the Fed to lower rates.