U.S. Consumer Prices Expected to Rise in July as Gasoline Prices Ease

U.S. consumer prices were expected to rise moderately in July even as gasoline prices eased, potentially reinforcing financial-market expectations that the Federal Reserve would leave interest rates unchanged this year, Lucia Mutikani reported for Reuters.

 Investors are watching consumer-price data for clues about the Federal Reserve's next interest-rate decision.

The Labor Department's Consumer Price Index report, due Wednesday, followed news the previous week of unexpected job losses in July.

Economists said the United States' position as a net oil exporter and a drawdown in petroleum inventories had helped cushion the economy from some of the effects of the oil-price shock triggered by the Middle East conflict.

Still, economists viewed inflation risks as tilted to the upside amid continued uncertainty over the conflict involving the United States, Israel and Iran.

President Donald Trump accused Iran of being "devious negotiators" in an interview released late Monday.

He described some of the options under consideration in the conflict, including allowing Tehran's economy to weaken or taking more forceful military action.

Sung Won Sohn, a professor of finance and economics at Loyola Marymount University, said he did not expect a significant surprise from the inflation report and did not expect the Federal Reserve to raise or cut interest rates unless both unemployment and consumer-price data deteriorated significantly.