US Inflation Holds Above Target for 65th Month

The US inflation rate held steady at 3.7% in July, above the Federal Reserve's target of 2%, for the 65th consecutive month.

Economists had forecast a reading of 3.6%, but the actual figure was unchanged from June, according to data released by the Commerce Department's Bureau of Economic Analysis on Wednesday.

The Personal Consumption Expenditures Price Index, which is used by the Fed as its target for inflation, also showed a higher-than-expected month-over-month increase of 0.2% in July, after falling 0.1% in June.

This data may support a hike in interest rates at the central bank's September meeting, with Fed funds futures prices reflecting a 42% probability of a rate hike after the report, up from about 36% immediately before.