The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market’s reaction is the distribution of forecasts.

In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.

CPI Y/Y

• 3.6% (2%)
• 3.5% (8%)
• 3.4% (65%) – consensus
• 3.3% (25%)

CPI M/M

• 0.3% (2%)
• 0.2% (32%)
• 0.1% (58%) – consensus
• 0.0% (8%)

Core CPI Y/Y

• 2.8% (2%)
• 2.6% (4%)
• 2.5% (82%) – consensus
• 2.4% (12%)

Core CPI M/M

• 0.3% (16%)
• 0.2% (77%) – consensus
• 0.1% (6%)
• 0.0% (1%)

The focus will be mainly on the Core CPI M/M measure since a few FOMC members mentioned that the monthly pace in core inflation will be key for their decision. Therefore, this should be one of those rare reports where even an in-line figure could still trigger a significant market reaction as it would be enough to reduce the probabilities of a September hike.