US, UK Inflation Data Alter Rate Cut Outlooks

US inflation data for June showed headline CPI rising 0.3% month-over-month and 2.7% annually, while core inflation increased 0.2% monthly and 2.9% annually, slightly below some forecasts. Producer prices remained steady and mixed wholesale price data, along with tariffs driving up goods costs, have led the Federal Reserve to adopt a more cautious stance on cutting rates, with markets now expecting fewer than two cuts by year-end. The US dollar rose against major currencies, including the euro and yen, as traders adjusted their expectations. In the UK, inflation unexpectedly climbed to 3.6% in June, lifting the pound and reducing the likelihood of an imminent Bank of England rate cut, though at least one cut is still anticipated this year. Both the Fed and BoE are watching labor market trends closely, making upcoming jobs data critical for policy directions. Meanwhile, ongoing US tariff negotiations and global trade uncertainties are supporting safe-haven assets like gold.