Will the US Core Inflation Go Down Tomorrow?

Tomorrow marks the release of the Consumer Price Index for July 2025, a vital snapshot of US inflation. Recent months have seen price pressures rise, driven by tariffs and supply chain disruptions.

Meanwhile, Federal Reserve officials have hinted that interest rate cuts may be approaching after a softer jobs report, setting the stage for this inflation data to heavily influence policy decisions.

Alongside inflation figures, tech earnings from companies like Cisco and Circle will provide fresh clues about AI infrastructure investments and cryptocurrency market trends.

Let’s dive into what to expect from tomorrow’s inflation report and the broader economic signals this week.

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Key Takeaways

1. Inflation data may show rising pressures due to tariffs and supply chain costs pushing prices higher.

2. Federal Reserve policymakers are watching closely as this data could influence the timing of upcoming rate cuts.

3. Tech earnings and crypto updates provide added context on innovation and market confidence.

What Is US Core Inflation and Why Does It Matter?

Core inflation measures the change in prices for goods and services, excluding the often-volatile food and energy sectors.

It is considered a more stable indicator of long-term inflation trends. The Consumer Price Index (CPI) report scheduled for tomorrow focuses heavily on this metric.

In recent months, core inflation has been creeping upward. In June, the year-on-year core CPI rose by 2.4%, signaling steady price growth.

However, economists anticipate July’s figure might edge higher because tariffs implemented earlier this year are increasingly impacting the cost of consumer goods.

Tariffs act like taxes on imports, making goods more expensive and pushing overall prices up. Why is this important? The Federal Reserve uses core inflation as a key guide for monetary policy decisions.

If inflation proves more persistent than expected, it might delay plans to lower interest rates, even if job growth remains weak. This makes tomorrow’s report critical for markets and policymakers.

Read Also: US Inflation Rises Again: What the Latest Data Means for Markets and Crypto

How Could Tomorrow’s Inflation Data Affect Federal Reserve Decisions?

Federal Reserve officials have recently softened their tone on interest rate hikes, largely influenced by a weaker-than-expected jobs report last week.

This shift opened the door to potential rate cuts in the near future. However, inflation data often holds the final say.

If July’s CPI shows core inflation rising faster than anticipated, it could signal that price pressures remain firmly entrenched. This may force the Fed to maintain or even raise rates to prevent the economy from overheating.

On the other hand, if inflation cools or stays steady, it would support the case for rate reductions later this year. Fed Presidents such as Tom Barkin, Austan Goolsbee, and Raphael Bostic will be closely monitoring the data.

Their comments following the release may provide further clarity on the Fed’s policy direction. Markets are already pricing in a rate cut for September, but tomorrow’s numbers could shift those expectations.

Read Also: Did US Inflation Go Up Again? Looking at the Latest Announcement

What Else to Watch This Week: Tech Earnings and Crypto Developments

Tomorrow’s inflation report isn’t the only economic event grabbing attention this week. Earnings from key technology companies will offer insight into how sectors like AI infrastructure and cryptocurrency are evolving amid economic pressures.

1. Cisco Systems will report earnings on Wednesday after a strong quarter boosted by AI-related demand.

2. Circle Internet Group, a major stablecoin issuer, reports on Tuesday. The recent passage of the GENIUS Act has provided regulatory clarity for stablecoins, helping boost Circle’s stock by over 400% since its IPO.

3. CoreWeave, partnering with Nvidia on cloud computing, is also releasing its Q2 results amid heavy investment in AI data centers.

These earnings could signal how much companies are investing in innovation despite inflation concerns.

For cryptocurrency investors, Circle’s report is especially important given the new regulatory framework enhancing the industry’s legitimacy.

Additionally, inflation-linked data such as the Producer Price Index on Thursday and consumer sentiment surveys on Friday will offer more clues about economic conditions.

Read Also: US Inflation Slows Inflation Report Strengthens Rate Cut Expectations

Conclusion

Tomorrow’s release of July’s Consumer Price Index will be a key moment for the US economy. With inflation pressures rising due to tariffs and supply chain challenges, core inflation may continue its upward trend.

The Federal Reserve will weigh these findings carefully as it decides when to adjust interest rates, impacting markets and consumers alike.

Alongside inflation data, tech earnings and cryptocurrency updates this week provide a fuller picture of economic resilience and innovation.

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FAQ

What is the Consumer Price Index (CPI)?

CPI measures the average change over time in prices paid by consumers for a basket of goods and services. It includes core inflation, which excludes food and energy prices.

Why is core inflation important?

Core inflation provides a clearer picture of long-term price trends by removing volatile food and energy costs, helping the Federal Reserve make policy decisions.

How do tariffs affect inflation?

Tariffs increase the cost of imported goods, which can push up consumer prices and overall inflation.

What will the Fed do if inflation stays high?

The Federal Reserve might delay cutting interest rates or even raise them to keep inflation under control.

Why do tech earnings matter for inflation and the economy?

Tech companies’ investments and earnings can indicate economic health and innovation trends, influencing market confidence during inflationary periods.

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