Fed Interest Rate Hike Odds Slammed by Steady U.S. Inflation

U.S. inflation remained steady at 3.7% in July, defying expectations of a decline and casting doubt on the Federal Reserve's plans to raise interest rates.

The Personal Consumption Expenditures Price Index (PCE), which the Fed uses as its benchmark for inflation, held firm at 3.7% annually, matching June's reading.

Core PCE inflation, excluding energy and food prices, also remained unchanged at 3.3%, while monthly inflation accelerated to 0.2%

The steady inflation rate is a blow to the Fed's efforts to bring inflation back down to its 2% target, which it has exceeded for 65 straight months.