Jul 2025 CPI Estimate

Tomorrow at 8:30 am ET, we will get the long-awaited Jul CPI. This will be one of the most important CPIs in a while, as it could make or break a Fed cut in Sep. If there is still no meaningful tariff-related inflation in the CPI, the Fed might cut in Sep, but if we see an uptick in CPI due to the tariffs, the Fed might delay the cuts further.

My average error for estimating headline CPI (based on the last 29 CPI estimates from Feb 2023 - Jun 2025) is almost perfect at -1 bps (-0.01 pp).

More importantly, my headline CPI estimates have been closer to the actual number than the average Wall Street estimates by 2 bps on average, 17 times in the last 25 months, or 68% of the time.

My average error for estimating core CPI (based on the last 29 core CPI estimates from Feb 2023 - Jun 2025) is also almost perfect at -1 bps (-0.01 pp).

My core CPI estimates have been closer to the actual number than the average Wall Street estimates by 2 bps on average, 17 times in the last 25 months, or 68% of the time.

For public links to my prior month's CPI estimates, go to ArkominaResearch.com.

After all the Aug 7 tariffs, inflation figures have been even more scrutinized by the market. If we see any miss here, the market could tank, while another tame read could extend the rally. So, where will the CPI print tomorrow?

My Jul CPI estimates are…

• Headline CPI

  • +0.1% MoM (-0.1 pp lower than consensus, and -2 bps below the Cleveland Fed)

  • +2.7% YoY (-0.1 pp lower than consensus and -2 bps below the Cleveland Fed)

• Core CPI

  • +0.2% MoM (-0.1 pp lower than consensus and +1 bp above the Cleveland Fed)

  • +3.0% YoY (the same as consensus and +1 bp above the Cleveland Fed)

My unrounded estimates:

If CPI comes in like I expect, it may not strengthen the Fed’s case to cut rates in Sep, but it may not derail it either. Ultimately, what the Fed does in Sep will depend on Aug CPI and Aug Employment Report.

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