US Inflation Rate Seen Dropping in July Amid Tech Price Risks
The US inflation rate is expected to continue its downward trend in July, according to analysts. The consumer price index (CPI) is predicted to dip to 3.4%, while the core rate, excluding food and energy prices, is expected to decrease to 2.5%. This would be a welcome relief for the Federal Reserve, which has been working to bring inflation back down to its target of 2%.
However, some economists are warning that rising tech prices could become a problem in the future. Memory prices have been increasing due to the high demand for chips by AI systems, and Apple has already announced plans to raise prices on several of its products.
The Federal Reserve's new chair, Kevin Warsh, is considering introducing alternative inflation measures to better gauge where inflation actually is. Warsh prefers 'trimmed average measures' that strip out the highest and lowest numbers, which he believes will give a more accurate picture of inflation.