US Inflation Rate Holds Steady Despite Ongoing Trade Tensions

The US inflation rate remains elevated, according to data released by the Commerce Department. The Consumer Price Index (CPI) rose 3.7% in July compared to a year earlier, unchanged from June. Inflation has worsened since the US and Israel attacked Iran in late February, when it stood at 2.9%. This marks the fifth consecutive month inflation has exceeded the Federal Reserve's target of 2%.

The increase in prices is attributed to several factors, including the ongoing war with Iran, which has kept gas prices high. President Donald Trump's threats of new tariffs on Canada and China have also contributed to higher costs. Additionally, spending on AI infrastructure has driven up the cost of computers, gaming consoles, and semiconductors.

Core inflation, excluding food and energy categories, was also unchanged at 3.3% in July. This marks a significant departure from its pre-tariff levels, which had fallen to 2.6% in April 2025. Consumer spending, adjusted for inflation, remained flat in July.