Inflation Remains Elevated as Fed Weighs Next Steps

The inflation rate remains high in the US, according to data released by the Commerce Department. Despite gas prices falling, overall prices rose 3.7% in July compared to a year ago, matching June's figure.

This is above the Federal Reserve's target of 2%, and it has worsened since the US and Israel attacked Iran in late February, when inflation stood at 2.9%. The personal consumption expenditures price index, or PCE index, ran hotter than the consumer price index, partly because it puts less weight on rental costs.

The Fed plans to adjust the way it calculates the cost of some services starting next month, which could lower measured inflation. This change is expected to reduce annual PCE inflation by 0.2 percentage point or so.