The stronger than expected 1.3% rise in consumer prices in June, which pushed headline inflation to 9.1%, from 8.6%, nails on another 75bp rate hike at the July FOMC meeting. But with commodity prices falling sharply since then and wage growth moderating in recent months, the outlook for inflation does not look as bleak as it did a month ago. Accordingly, speculation about a 100bp hike this month looks to be misplaced.
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