The U.S. consumer price index report for July is set for release, marking a key moment for Federal Reserve policy expectations and bond markets. Annual headline and core inflation rates are expected to edge lower, potentially reinforcing last week's soft jobs data and reducing speculation of a Fed rate hike next month, with markets currently pricing a 50% chance. The report is one of three major monthly inflation updates, with the producer price index due tomorrow and the Fed's preferred PCE gauge later in the month. Meanwhile, oil prices remain near $90 per barrel amid Iran tensions and Houthi attacks, though that will not be reflected in the July CPI.
