US consumer prices likely increased moderately in July as gasoline prices eased

WASHINGTON, Aug 12 (Reuters) - U.S. consumer prices likely increased moderately in July, which could further reduce financial market expectations for the Federal Reserve to raise interest rates this year.

The Labor Department's Consumer Price Index report on Wednesday would follow on the heels of news last week of surprise job losses last month. Economists said the United States' position as a net oil exporter and the drawing down of petroleum inventories had cushioned the hit on the economy from the oil price shock sparked by the Middle East conflict.

Still, they viewed inflation risks as tilted to the upside, with no resolution to the U.S.-Israeli war with Iran. President Donald Trump accused Iran of being "devious negotiators" in an interview released late on Monday and described some of his current options in the war — "just bop along" and let Tehran fail economically or hit them "really, really hard."

"I don't expect any significant firework when the numbers come out," said Sung Won Sohn, a finance and economics professor at Loyola Marymount University. "I don't really see the Fed either raising or lowering interest rates, unless things turn out badly for both unemployment and the CPI."