The US cash Treasury tape opens Wednesday August 12 at 8:00 ET into the July CPI release at 8:30 ET, the highest-weight inflation print between the July 30 FOMC hold and the September 16 to 17 decision. The strip carries the September cut probability at 91 percent into Tuesday’s close, three points softer on the week off the NFIB July Small Business Optimism release Tuesday at 6:00 ET that walked the compensation plans net to plus 23 (two points wider than the June print) and the prices raised net to plus 27 (two points wider than June). The December 10 second cut probability carries at 60 percent and the March 2027 third cut probability at 49 percent. The line the strip reads against the 8:30 ET print is a single ratio: supercore three-month annualized inside 3.0 to 3.5 percent walks the September cut inside 97 percent, and supercore back through 4.0 percent three-month annualized reopens the front-end distribution for the first time since May.
The overnight tape into the 8 ET cash open
Tuesday Globex has run the September ten-year note future inside a 112-14 to 112-22 half-point band, mapping an implied ten-year cash yield range of 3.95 to 3.99 percent, one basis point wider than Tuesday’s cash close at 3.97 percent. The two-year cash-equivalent implied off the September Schatz sits at 3.70 percent overnight, two basis points wider than Tuesday’s close on the NFIB compensation and prices walk-throughs. The 2s10s at 27 basis points overnight sits at the flat end of the 27 to 34 basis point channel the strip has held since the July 30 statement. Fed funds futures carry the September 17 meeting at minus 23 basis points priced and the December 10 meeting at minus 38 basis points cumulative, both one to two basis points shallower than Monday’s close.
The three lines inside the 8:30 ET release
The BLS Consumer Price Index release at 8:30 ET is three prints layered under the same timestamp: the headline all-items index, the core index excluding food and energy, and the core services excluding shelter (supercore) disaggregation the Fed reads against. The June headline landed at plus 0.19 percent month over month with the year-over-year at 2.7 percent. The June core print landed at plus 0.18 percent month over month with the year-over-year at 3.0 percent. The June supercore print landed at plus 0.16 percent month over month with the three-month annualized rate at 3.4 percent, two ticks lower than the May three-month annualized reading at 3.6 percent.
The desk supercore band for the July print carries a plus 0.12 to plus 0.22 percent month-over-month range, mapped off the June services PPI at plus 0.19 percent month over month, the Q2 ECI services line at plus 0.9 percent for the quarter, and the flash services PMI input prices sub-index at 55.4 for July. A July supercore print inside plus 0.15 percent month over month walks the trailing three-month annualized rate to 3.2 percent, holding inside the low-3 band the September cut is pricing. A July supercore print at or above plus 0.22 percent walks the trailing three-month annualized rate back through 4.0 percent and reopens the front-end distribution.
The four categories the desk isolates inside the core basket
The owners equivalent rent line carries the highest single-category weight inside core CPI at 25.6 percent and the largest observable lag against market rents. The June OER print at plus 0.28 percent month over month confirmed the trailing six-month annualized rate walked to 3.3 percent, the lowest reading since March 2022. Rent of primary residence at plus 0.24 percent in June carried a trailing six-month annualized at 3.1 percent. The strip prices a July OER print inside plus 0.25 to plus 0.30 percent as consistent with the shelter disinflation trajectory the Fed is pricing.
The medical care services line carries the second-largest supercore weight and prints on a two-month lag rotation. The June medical services print at plus 0.31 percent month over month carried a year-over-year at 3.6 percent, walking two ticks wider than the May reading on the semi-annual health insurance methodology reset. The airline fares line and the motor vehicle insurance line carry the two highest-volatility supercore inputs. Motor vehicle insurance printed plus 0.11 percent month over month in June with a year-over-year at 6.1 percent, walking four points narrower than the March reading at 10.2 percent on the 2023 to 2024 premium reset annualization rolling off.
The three read-throughs on the release
Read one on the September dot: a supercore three-month annualized rate inside 3.0 to 3.5 percent confirms the disinflation trajectory the July 30 statement priced and walks the September cut probability inside 97 percent by the 9:00 ET tape. Read two on the December cadence: a supercore trailing three-month annualized at 3.0 percent or narrower walks the December second cut probability from 60 percent toward 78 percent and prices a three-cut year for the first time since May 2. Read three on the March 2027 third cut probability: a supercore print with the year-over-year core walking to 2.9 percent or narrower walks the March third cut past 55 percent and prices the cadence the July 30 SEP staff projections carried as consistent with the neutral-rate glide path.
The Thursday and Friday setup off the print
Thursday August 13 runs July PPI at 8:30 ET and weekly initial jobless claims at 8:30 ET under the same timestamp. The PPI services line is the lead read on the August supercore trajectory, the read the strip carries one month forward into the September 11 August CPI release the day before the FOMC decision. Friday August 14 runs July retail sales at 8:30 ET, July industrial production at 9:15 ET, and University of Michigan preliminary August sentiment at 10:00 ET, the last-of-week reads the December second cut probability walks through into next Monday’s open. The single trade the desk carries out of the 8:30 ET print today is the December cadence, not the September dot.