July US Inflation Rate Slows Amid Oil Price Drop

US inflation cooled down in July to 3.4% year-over-year (y/y), meeting expectations and reversing June's 3.5% rate. The Consumer Price Index (CPI) dropped due to a decline in oil prices, which were influenced by the recent ceasefire in the Middle East.

Core inflation, excluding food and energy components, rose by 2.5% last month compared to a 2.6% increase in June. Analysts expect labor market strength after a weak July performance, which could lead to increased price pressures as oil prices have begun to rise again.

The Federal Reserve kept interest rates unchanged during the July policy meeting and will continue to assess economic data before making any decisions at their next meeting on September 15-16. August's labor and CPI data will be released beforehand, providing more insight into the economy's performance.