July US Inflation Rate Rises to 3.7%

The US personal consumption expenditures (PCE) price index rose by 0.2% in July, pushing annual inflation to 3.7%. This slight increase above expectations will be closely watched by the Federal Reserve as they consider their next policy move.

Core inflation, which excludes food and energy prices, also increased by 0.2% monthly and 3.3% annually. While this aligns with forecasts, it remains a key focus for the Fed as officials are cautious ahead of their September policy meeting.

The Federal Reserve's target inflation rate is 2%, so with inflation still above this threshold, markets see a moderate chance of a rate hike later in the year.