THE CPI EXPECTED A SMALL FALL IN JULY, AND CITICORP AND THE BANK HAD A DISAGREEMENT ABOUT THE FUTURE OF THE SEPTEMBER HIKE

On 9 August, Reuters-surveyed economists predicted that the overall annual CPI rate in the United States in July would drop from 3.5 per cent in June to 3.4 per cent; the core CPI annual rate would drop from 2.6 per cent in the previous month to 2.5 per cent. Citigroup economists believe that, as expected, if inflation readings go soft for the second consecutive month, that would mean more than a month of data pointing to a cooling of inflationary pressures, which would largely preclude the possibility of a September hike. However, economists are also predicting a small increase in core services inflation in July, with a 0.3 per cent price increase. This figure was flat from May to June. According to United States bank analysts, the upturn in core service indicators could keep September interest rates on the table. The analyst Kate Duguid stated that if the latter view prevailed and inflation data were lower than expected, the Fed's interest rate hike could be delayed until December or later。