US Inflation Slows to 3.4%, Core Prices Match Post-Pandemic Low

US inflation eased to 3.4% year-over-year in July, down from 3.5% in June, according to Labor Department data released on Wednesday.

The monthly increase in consumer prices was a mere 0.1%, while core inflation, excluding volatile food and energy costs, dropped to 2.5% from 2.6% in June, matching a post-pandemic low.

This indicates that the impact of rising energy costs linked to the conflict in Iran has been limited so far, despite gas prices climbing to an average of $4.04 per gallon by mid-August.

Federal Reserve officials remain divided on interest rate policy, with Fed Chair Kevin Warsh signaling that higher borrowing costs remain an option to combat persistent inflation, though rate hikes would not be considered in isolation.