July Inflation Report Expected to Show Cooling Trends

The latest inflation report for July is expected to provide crucial signs of where prices are headed. According to economists, consumer prices rose 3.4% in July from a year earlier, down from 3.5% in June and lower than the recent peak of 4.2% in May.

The decline in inflation has been attributed to a drop in gas prices following a cease-fire in the U.S.-Iran war. However, gas prices have risen again in late July and earlier this month, which may indicate that inflation could pick up again when August's figures are released next month.

Core inflation, excluding food and energy categories, is expected to cool for a second month, down from 2.6% in June to 2.5%. The Federal Reserve will closely watch this report as it considers whether to hike its key interest rate to combat inflation.