Goldman Sachs: CPI data in line with expectations, focus will shift to labor market.

Goldman Sachs Multi-Asset Solutions Global Co-Chief Information Officer Alexandra Wilson-Elizondo stated that the CPI data for July met expectations, with core inflation rising 3.1% year-on-year. The Federal Reserve is supported by the data, believing that the impact of tariffs on price levels is mostly temporary. Tariffs have not led to significant price increases, as businesses offset cost pressures by reducing inventory and cautiously adjusting prices, due to consumers being sensitive to price changes. The Fed's policy heavily relies on data, and with inflation under control and signs of weakness in the labor market increasingly apparent in revised employment data, focus in the future will be more on employment. Overall, this inflation report supports expectations of a "insurance" rate cut by the Fed in September, which will be a key driver for the market.