US Inflation Eases to 3.4% in July, Supporting Fed's Interest Rate Decision

The US Consumer Price Index (CPI) rose by 3.4% in July year-over-year, down from 3.5% in June.

This moderation is seen as supporting the Federal Reserve's decision to keep interest rates steady at between 3.5% and 3.75%, despite a weak labor report.

Core inflation, which excludes food and energy prices, also dipped to 2.5%, but remains above the Fed's 2% target.

However, renewed tensions with Iran could push energy prices higher, potentially increasing inflation again in the near term.