Fed-Watched Inflation Gauge Stays Elevated Amid Iran Conflict and Trade Tensions

An inflation measure closely watched by the Federal Reserve remained elevated in July despite a decline in gas prices, and economists warn that stubbornly high costs may be a key issue in the midterm elections.

The personal consumption expenditures price index rose 3.7% in July compared with a year earlier, the same as June, according to data released by the Commerce Department on Wednesday.

Inflation has worsened since the US and Israel attacked Iran in late February, when it stood at 2.9%, and is noticeably above the Fed's target of 2%.