US Economy Stuck in High-Inflation Quagmire as Rates May Rise

The US economy continues to face challenges from high inflation, which remains above the Federal Reserve's target of 2%. The Commerce Department reported that prices rose 3.7% in July compared to a year earlier, the same as June. This marks a worsening trend since the US and Israel attacked Iran in late February, when inflation stood at 2.9%.

Fed Chair Kevin Warsh acknowledged that recent data show inflation has cooled slightly but emphasized that 'underlying trends have not meaningfully improved.' He suggested that interest rates may need to be raised to bring inflation down to the Fed's target, a move that could happen in the coming months.

Consumer confidence fell to its lowest level in seven months, with Americans expressing concerns about their economic situation and future prospects. This decline poses a risk for President Donald Trump and Republicans ahead of the midterm elections, which are less than 70 days away.