will grade deflation at my HS hurt my chances of admission?

My UW GPA is barely a 3.7, but I am ranked 7th in my class of roughly 400 (and expected to hopefully go up a bit more by the end of fall semster) at one of the top public high schools in my state. I realize that my GPA is very low in comparison to those of students accepted at top Us (although my test scores are decent), so I’m wondering if top colleges will recognize that there is some grade deflation at my school and that I’m not a terrible student or will my gpa drastically lower my chances of admission? (I’m obviously not going for HYPSM, but I guess more “second-tier” schools)

No, it won’t hurt you at all.