Mild U.S. July Core Inflation May Ease Pressure on Fed to Raise Rates
U.S. underlying inflation remained mild in July, potentially easing pressure on the Federal Reserve to raise interest rates. The U.S. Bureau of Labor Statistics said Wednesday that core consumer prices, excluding the volatile food and energy categories, rose 0.2% from the previous month. Core CPI increased 2.5% from a year earlier, matching its lowest annual growth rate since March 2021. Overall, the consumer price index rose 0.1% month over month in July and 3.4% from a year earlier. The report indicated that the impact of the energy-price shock triggered by the Iran war continued to fade in July. The data could give the Fed more room to weigh inflation pressures against a recent slowdown in hiring when considering whether to raise borrowing costs at its Sept. 15-16 meeting. Before that meeting, policymakers will receive additional employment and inflation reports. Investors will also closely watch remarks expected later this month from Fed Chair Kevin Warsh at the central bank's annual Jackson Hole symposium. U.S. stock-index futures rose, while Treasury yields were little changed. Investors reduced their bets on a Fed rate hike in September. A related topic identified on the source page was falling energy prices and a June CPI increase that was below expectations.
The U.S. Bureau of Labor Statistics said Wednesday that core consumer prices, excluding the volatile food and energy categories, rose 0.2% from the previous month. Core CPI increased 2.5% from a year earlier, matching its lowest annual growth rate since March 2021.
Overall, the consumer price index rose 0.1% month over month in July and 3.4% from a year earlier.
The report indicated that the impact of the energy-price shock triggered by the Iran war continued to fade in July. The data could give the Fed more room to weigh inflation pressures against a recent slowdown in hiring when considering whether to raise borrowing costs at its Sept. 15-16 meeting.
Before that meeting, policymakers will receive additional employment and inflation reports. Investors will also closely watch remarks expected later this month from Fed Chair Kevin Warsh at the central bank's annual Jackson Hole symposium.
U.S. stock-index futures rose, while Treasury yields were little changed. Investors reduced their bets on a Fed rate hike in September.
A related topic identified on the source page was falling energy prices and a June CPI increase that was below expectations.