US Inflation Cools to 0.1% as Fed Rate Hike Urgency Eases
US inflation cooled in July as consumer prices rose just 0.1%, according to the Bureau of Labor Statistics. This moderation across a range of goods and services has potentially eased the urgency for an imminent interest rate hike by the Federal Reserve. The consumer price index, a key component of the Fed's inflation dashboard, came in at 3.4% on an annual basis.
Excluding food and energy, so-called core CPI rose 0.2%. Energy prices dropped another 1.5% for the month, following a 5.7% decrease in June. Both food and shelter rose 0.1% in July, with shelter costs remaining a key factor keeping inflation above 2%.
The tame monthly readings suggest that the energy-fueled burst seen earlier in the year is easing. Despite this, prices remain volatile and subject to changing conditions in the Middle East. Stock market futures rose following the release, while Treasury yields fell across the board.