July marked the mildest year-over-year inflation figure since March 2021 in the United States. Here's what that means for hopes for a September rate cut.
The U.S. Federal Reserve held its key interest rate steady on Wednesday but opened the door to reducing borrowing costs as soon as its next meeting in September.
The government said nearly all of July’s inflation reflected higher rental prices and other housing costs, a trend that, according to real-time data, is easing. As a result, housing costs should rise more slowly in the coming months, contributing to lower inflation.
Even as inflation — the rate of price increases — keeps slowing, many people are still struggling with daily costs that, on average, are still about 20% higher than they were three years ago. That’s true even though average U.S. wages have surpassed inflation for more than a year. Austan Goolsbee, president of the Federal Reserve’s Chicago branch, said Wednesday in an interview with The Associated Press that the July data shows that inflation is clearly on track to return to the central bank’s 2% target. He also noted that there are signs that the job market is weakening even while the Fed’s key rate remains at its highest level in decades.Mpox is on the rise. What Canadians need to know as the virus spreads“Yes, yes, yes,” he said.
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