Here comes the biggest economic news of the week ...
Economists estimate that the gauge of inflation rose 0.2% month-on-month in July, and by the same amount excluding volatile food and energy costs, according to Bloomberg.
Compared to last year, economists are looking for a 0.2% gain from June, and 1.8% excluding food and energy.
It's a crucial data point that comes ahead of the Federal Reserve's September meeting, when many market participants believe the FOMC could raise rates for the first time in a decade.
The Fed is in a 'live mode', taking all the data as they come to make its decision. Inflation is one of the most crucial.
Inflation has long run below the Fed's 2% target. However, the Fed is confident that inflation will gradually rise towards its target in the medium term, as the labor market gets stronger.
In a morning note to clients, Societe Generale's Kit Juckes wrote (emphasis added), "Long after this cycle is over, the stability of both core CPI and wage growth in the US, in both the post-2008 downturn and the subsequent recovery, will be a huge source of debate. For now though, there will be plenty of people to say that the lack of any upward pressure to inflation justifies keeping rates at current levels for longer (and I shall continue to disagree strongly)."
The Fed's July statement also noted that inflation will likely move towards the 2% target as the "effects of earlier declines in energy prices and import prices dissipate." However, crude oil prices are tumbling again, and are about 30% down from the peak in June. And so, economists are watching for what effect this may have on inflation, and on the Fed's outlook.
We'll be back at 8:30 a.m. with all the details on the CPI data.