CPI continues to decline, with a 43.5% probability of a 50 basis point rate cut in September.

The U.S. July unadjusted CPI year-on-year rate is 2.9%, falling for the fourth consecutive month, marking the first return to the "2 range" since March 2021, with market expectations at 3%. The U.S. July unadjusted core CPI year-on-year rate is 3.2%, also falling for the fourth consecutive month, the lowest level since April 2021, in line with market expectations. Following the release of U.S. CPI data, spot gold rose nearly $10 in the short term, priced at $2473.55 per ounce. Spot silver touched $28 per ounce, rising 0.63% on the day. The DXY dollar index fluctuated over 20 points in the short term, priced at 102.57.

After the release of the US CPI data, traders have lowered their expectations for a Federal Reserve rate cut. Traders believe that the probability of a 25 basis point cut at the Fed's September meeting is 56.5%, while the probability of a 50 basis point cut is 43.5%. Many investors and economists have recently become more concerned about the risk of economic recession after the unexpectedly weak July jobs report released earlier this month. However, many economists still believe that the US may be able to avoid a near-term recession. They point out that the recent rise in the unemployment rate is driven by temporary layoffs, and some analysts also believe that the slowdown in inflation is a positive factor. On Wall Street, the recent debate is not whether the Fed will cut rates soon, but by how much, with some betting that the Fed will cut by 50 basis points in September.

The core CPI in the U.S. rebounded in July as expected, but the trend remains consistent with easing inflation and does not change expectations for a Fed rate cut next month. The U.S. Bureau of Labor Statistics stated on Wednesday that after a 0.1% decline in June, the CPI rose by 0.2% month-over-month in July, and increased by 2.9% year-over-year. The year-over-year growth rate of the CPI has significantly slowed from its peak due to rising borrowing costs cooling demand. Although the inflation rate remains high, it is moving towards the Fed's target of 2%. The option for a rate cut in September is between 25 and 50 basis points; however, economists believe that the labor market must deteriorate significantly for the Fed to cut rates by 50 basis points.