{"id":1473,"date":"2025-07-20T08:58:06","date_gmt":"2025-07-20T08:58:06","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/07\/20\/usd-higher-as-upbeat-june-cpi-dampened-fed-rate-cut-hopes\/"},"modified":"2025-07-20T08:58:06","modified_gmt":"2025-07-20T08:58:06","slug":"usd-higher-as-upbeat-june-cpi-dampened-fed-rate-cut-hopes","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/07\/20\/usd-higher-as-upbeat-june-cpi-dampened-fed-rate-cut-hopes\/","title":{"rendered":"USD Higher As Upbeat June CPI Dampened Fed Rate Cut Hopes"},"content":{"rendered":"<div dir=\"ltr\">\n<p>U.S. consumer prices rose 0.3% in June, marking the largest monthly increase in five months and pushing the annual inflation rate to 2.7% from 2.4% in May.<\/p>\n<p>This acceleration exceeded expectations of a 2.6% annual headline inflation print and highlighted emerging pressures from trade policies, though core inflation still fell short of estimates on a monthly basis.<\/p>\n<p>Excluding food and energy costs, price pressures ticked 0.2% higher month-on-month versus the 0.3% forecast but the annual core reading still rose to 2.9%.<\/p>\n<p><strong>Key Takeaways<\/strong><\/p>\n<ul>\n<li> <strong>Headline CPI<\/strong>: +0.3% monthly (vs. 0.3% expected), +2.7% annually (vs. 2.4% prior)<\/li>\n<li> <strong>Core CPI<\/strong>: +0.2% monthly (vs. 0.3% expected), +2.9% annually (vs. 2.8% prior)<\/li>\n<li> <strong>Shelter costs<\/strong>: Rose 0.2% monthly, continuing as primary driver of inflation<\/li>\n<li> <strong>Energy sector<\/strong>: Gained 0.9% with gasoline prices up 1.0% for the month<\/li>\n<li> <strong>Food inflation<\/strong>: Increased 0.3% monthly, with food away from home up 0.4%<\/li>\n<li> <strong>Early tariff signals<\/strong>: Price pressures evident in household furnishings (+12.4% annualized), recreation goods (+9.7%), and clothing (+5.3%)<\/li>\n<\/ul>\n<p>Early evidence of tariff-related price increases appeared in several categories. Fruits and vegetables surged 11.5% on a seasonally adjusted annualized basis, while home furnishings jumped 12.4% with broad-based increases across furniture and appliances.<\/p>\n<p><strong>Link to official U.S. Consumer Price Index (June 2025)<\/strong><\/p>\n<p>However, offsetting factors provided some relief. The crucial shelter component, which carries a 40% weighting in core CPI, showed moderation with a 0.2% monthly increase. New vehicle prices declined 0.3% and used cars fell 0.7%, defying expectations of tariff-driven increases in the automotive sector.<\/p>\n<p>The softening in core goods prices, particularly the 0.04% monthly decline excluding vehicles, suggests tariff impacts may be more delayed than initially anticipated. This aligns with historical patterns where tariff effects typically emerge approximately three months after implementation.<\/p>\n<h2>Market Reaction:<\/h2>\n<p><strong>U.S. Dollar vs. Major Currencies: 5-min<\/strong><\/p>\n<p>The dollar strengthened broadly following the CPI release, with the USD gaining against major currencies as traders scaled back Federal Reserve rate cut expectations.<\/p>\n<p>According to the CME FedWatch Tool, the probability of a July rate cut dropped to just 2.6% from around 6% earlier in the week. September rate cut odds also decreased to approximately 54% from nearly 60%, reflecting market participants\u2019 reassessment of the Fed\u2019s likely policy path.<\/p>\n<p>Price action for the rest of the U.S. session showed the dollar\u2019s resilience, with notable gains against the Japanese yen (+0.82%), euro (+0.77%), and Australian dollar (+0.73%) hours after the CPI release.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>U.S. consumer prices rose 0.3% in June, marking the largest monthly increase in five months and pushing the annual inflation rate to 2.7% from 2.4% in May. This acceleration exceeded expectations of a 2.6% annual headline inflation print and highlighted emerging pressures from trade policies, though core inflation still fell short of estimates on a<\/p>\n","protected":false},"author":2,"featured_media":1474,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"featured_image_urls":{"full":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",780,393,false],"thumbnail":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393-150x150.png",150,150,true],"medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393-300x151.png",300,151,true],"medium_large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393-768x387.png",640,323,true],"large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",640,322,false],"1536x1536":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",780,393,false],"2048x2048":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",780,393,false],"morenews-featured":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",780,393,false],"morenews-large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393.png",780,393,false],"morenews-medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393-590x393.png",590,393,true],"crawlomatic_preview_image":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/07\/1473-250715_us-cpi-780x393-260x131.png",260,131,true]},"author_info":{"display_name":"henry","author_link":"http:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"<a href=\"http:\/\/ft365.org\/index.php\/category\/latest-news\/\" rel=\"category tag\">Latest News<\/a>","tag_info":"Latest News","comment_count":"0","_links":{"self":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/1473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=1473"}],"version-history":[{"count":0,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/1473\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/1474"}],"wp:attachment":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=1473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=1473"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=1473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}