Fed Gets Reprieve from Benign Inflation Data Ahead of Rate Decision

New inflation data has given the Federal Reserve some breathing room as it considers raising interest rates at its policy meeting next month.

The latest consumer price index report showed a modest easing of price pressures in July, with prices rising 0.2% from the previous month or 2.5% compared to the same time last year.

This is consistent with inflation eventually retreating to the Fed's target of 2%, as measured by the personal consumption expenditures (PCE) index, which has been running at 3.7% since June.

The Fed next votes on rates in mid-September, and a string of benign inflation reports from here on out would help alleviate pressure to take action.