Consumer prices rose 0.1% in July, as expected, putting the annual rate at 3.4%

JUST IN: US consumer prices rose 0.1% in July, in line with expectations, putting the annual inflation rate at 3.4%.

Inflation came in at 3.4 percent for the year, and Wall Street just exhaled. Consumer prices rose a tiny 0.1 percent in July, exactly what forecasters expected, and core inflation sits at 2.5 percent.

The real story is energy. Prices there fell another 1.5 percent on the month, cooling off that burst from earlier in the year after the Iran attacks sent everything sideways. Shelter still did most of the damage, about two thirds of the whole increase, and airline fares jumped 2.2 percent, so it's not all calm.

Stock futures rose on the print, Treasury yields fell, and traders cut the odds of a September rate hike to 42 percent. The Fed doesn't meet until next month, and it gets one more inflation report before deciding. A week ago a hike looked likely. Today it's a coin flip, and coin flips are what we live for.

So, does the Fed hike rates at the September meeting?

This is Dave King, reporting for HIT.

Source Read the original reporting at cnbc.com