Will monthly inflation increase by 0.1% or more in July?

Prediction markets put the probability at 64%: Will monthly inflation increase by 0.1% or more in July. Currently, markets are divided (64% YES, 36% NO). The month-on-month decline of 0.1% marks a moderation from June’s flat reading (0.0% MoM).

What’s Happening

The current market pricing for a monthly inflation increase by 0.1% or more in July sits at a 64% probability, a notable shift from the disinflationary momentum seen across major economies in recent months. In the U.S., the most recent comparable data point from July 2025 showed the Consumer Price Index flat (0.0% MoM), with core prices accelerating slightly, while the Personal Consumption Expenditures (PCE) price index actually fell 0.1% for the month, putting the annual rate at 3.7%. That mixed backdrop makes the current 64% odds for a July increase a meaningful bet on a reversal of the cooling trend, especially given that the Producer Price Index (PPI) unexpectedly declined 0.1% in August 2025, suggesting upstream cost pressures remain weak. [PBS, Aug 12] [CNBC, Sep 10]

International data adds another layer of complexity to the monthly inflation increase by 0.1% or more in July outlook. Spain's HICP fell 0.1% month-on-month in July, a better-than-expected reading that beat the -0.2% forecast, while annual inflation eased to 2.9% from 3.4% in June. Canada's August CPI also came in at -0.1% monthly, below the +0.1% consensus. These figures suggest that the global disinflationary pulse remains intact, which historically has been a headwind for U.S. inflation prints. However, the market's 64% YES probability implies traders are weighing tariff-related import costs — such as the 1.4% jump in shoe prices and 0.9% rise in furniture costs seen in July 2025 — as a countervailing force that could push the monthly figure above the 0.1% threshold. [Bitcoinworld, Jul 30] [Reuters, Sep 16]

Looking at the immediate catalyst, the July 2026 data release is the key event, with the U.S. economy having slowed to a 1.5% growth rate in Q2 2026 per the latest GDP report. The June core PCE reading came in at 0.1% monthly, below the 0.2% forecast, which sets a low bar for the July print. If the monthly inflation increase by 0.1% or more in July materializes, it would mark the first time in three months that the headline figure has moved higher, breaking the recent streak of flat or negative monthly readings. Conversely, a NO outcome would align with the broader trend of easing pressures seen in Spain, Canada, and the U.S. PPI. The 64/36 split suggests the market sees a slight edge for acceleration, but the wide gap between the U.S. PCE deflation and the tariff-driven goods inflation makes this a genuine coin-flip scenario for the Federal Reserve's preferred gauge. [Traded on Polymarket — $52K Volume

Lower-volume market on Polymarket ($52K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 64c YES.