Inflation Eases, But Fed Faces Dilemma Amid Job Losses
The US inflation rate eased to 3.4% in July as the Federal Reserve's next move remains uncertain, according to the latest figures from the US Bureau of Labor Statistics.
The annual inflation rate dropped from May's 4.2%, while core prices rose 0.2% after being flat in June, easing to 2.5% annually.
The Fed's benchmark rate has been at 3.50% to 3.75% since July 29, with three regional presidents dissenting in favor of a quarter-point rise.
Cleveland Fed president Beth Hammack argued that a single quarter-point move would achieve little and several may be needed, while her counterpart John Williams expects inflation to fall this half.
The bigger threat to disinflation lies in the Strait of Hormuz, which remains largely closed due to talks on reparations demands.