July CPI Cools to 3.4%, But Fed Hold Still Favored for September
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July CPI cooled to 3.4% YoY (core CPI 2.5% YoY) with energy prices down 1.5% and monthly headline at 0.1%. Prediction markets put a 68.2% chance of a Fed hold in September 2026 versus 17% for a cut, so softer inflation hasn’t shifted expectations and could weigh on crypto risk assets by keeping borrowing costs higher for DeFi, slowing fundraising and token launches on CEXs and DEXs.
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- July CPI cools, with headline CPI up 3.4% YoY, core CPI up 2.5% YoY, while energy prices fell 1.5%.
- Prediction markets still favor a September Fed rate hold at 68.2% versus 17% cut as Fed seeks clearer proof.
- This raises the question of why softer inflation has not translated in expectations for a September rate cut.
On August 12, 2026, the Bureau of Labor Statistics (BLS) released its July Consumer Price Index (CPI) report, showing annual inflation cooling to 3.4% as energy prices fell 1.5%. Despite softer inflation, traders on prediction platforms like Kalshi still favor a Fed rate hold at the September 2026 Federal Open Market Committee (FOMC) meeting, with 68.2% pricing a hold versus 17% for a cut.
Inflation Cooled So Why Isn’t the Fed Cutting Rates?
July CPI data reflects a moderation of inflation, with headline CPI at 0.1% MoM and 3.4% YoY, and core CPI …
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