U.S. Inflation Eases, but Remains Above Target Rate Amid Ongoing Tensions

The U.S. inflation numbers for July were released this past week and showed a slight easing from June's figures, but remained above the Federal Reserve's target rate of 2%. The Consumer Price Index (CPI) rose by 3.4%, down from June's 3.5%, while the core inflation rate decreased to 2.5% from June's 2.6%. The Producer Price Index (PPI) also showed a decline, dropping to 4.7% in July, its lowest level since March 2026.

Despite this easing, inflation remains a concern for the U.S. economy, particularly if the ongoing tensions between the U.S. and Iran lead to a further spike in oil prices. Oil has become a major factor in the conflict, with prices surging by 45% since the war began in late February 2026.

The Japanese yen has also been in the spotlight, as its value rose following a coordinated intervention from the Bank of Japan and the U.S. Treasury. However, the yen's gains were short-lived, and it is expected that further intervention will be necessary to stabilize the currency.