US Economy Faces Rising Inflation and Higher Mortgage Rates

The US economy is facing rising inflation and higher mortgage rates, affecting households and businesses alike. The Commerce Department reported that prices rose 3.7% in July compared to a year earlier, the same as June, with inflation worsening since the US and Israel attacked Iran in late February. This is above the Federal Reserve's target of 2%, indicating potential rate hikes.

Federal Reserve Chair Kevin Warsh signaled that interest rates may need to rise to bring down inflation, which has not yet reached the Fed's objective. He acknowledged recent data showing a slight cooling of inflation but emphasized that underlying trends have not improved meaningfully. The next Fed meeting is September 15-16.

The number of Americans applying for jobless aid remains at historic lows, with claims slipping to 203,000 last week from a revised 207,000 the week before. However, mortgage rates ticked higher this week, nudging the average long-term US home loan rate closer to its recent high for the year.