July CPI delivered exactly what markets expected, yet the reaction shows expectations themselves are moving. With headline inflation easing to 3.4% and core to 2.5%, the case for a September hike weakened further, although inflation remains above target and the Fed is still cautious.

For me, the next leg depends less on CPI and more on jobs, PCE and energy. Another soft labour report plus benign PCE could push hike expectations even lower, supporting growth stocks and gold. But renewed energy inflation or stronger demand could quickly revive the hawkish trade.

So this CPI was not the catalyst. It removed an obstacle. The bigger question is whether the next data confirm a genuine disinflation trend or expose July as another temporary soft patch.