CoinDesk
Macro writer Mike “Mish” Shedlock argues that July's softer U.S. CPI reading understates the inflation pressure beneath the headline. A short retreat in energy and gasoline prices pulled the figure lower, while he says food prices are undercounted and key housing costs are left out by BLS methods.
Why it matters
The report offers a milder surface reading without resolving the underlying inflation debate. Shedlock points to property taxes, insurance and home prices as housing costs the index ignores, making the marginal month-on-month increase and year-on-year decline less conclusive as evidence of broad disinflation.
Market impact
The response in markets was muted. The marginal month-on-month increase and year-on-year decline in CPI did not translate into a material softening of the Dollar Index, offering little support for BTC. Bitcoin continued to trade choppily below $64,000. Markets will watch whether energy relief persists and whether food and housing pressures ease.
Frequently asked questions
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What temporarily pulled July's headline CPI lower?
A short retreat in energy and gasoline prices pulled the headline figure lower in July.
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Which costs does Shedlock say the CPI undercounts or omits?
He says food prices are undercounted, while property taxes, insurance and home prices are left out of the index.
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How did the July CPI reading affect the Dollar Index?
The marginal month-on-month increase and year-on-year decline in CPI did not translate into a material softening of the Dollar Index.
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Why did the report offer little support for BTC?
The Dollar Index did not materially soften after the report, limiting the macro support available to BTC.
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What will markets watch after the July CPI release?
Markets will watch whether energy relief persists and whether food and housing pressures ease.
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