Fed Interest Rate Decision Hinges on Slowing US Inflation
The US inflation rate cooled down in July, raising hopes that the Federal Reserve will keep interest rates steady at its upcoming September meeting.
The core Consumer Price Index (CPI), which excludes food and energy prices, rose by 2.5% over the past 12 months, matching expectations and slightly lower than June's 2.6% increase.
On a monthly basis, the core CPI increased by 0.2%, also in line with projections.
The slowdown in inflation has strengthened the perception that prices are under less pressure, which could influence the Fed's decision-making process.
Fed Governor Lisa Cook said she might take action if inflation doesn't continue to decline, but highlighted the need to consider the labor market in upcoming decisions.
Most voting members of the Federal Open Market Committee (FOMC) currently prefer keeping interest rates stable, with three members advocating for a small increase in July.