U.S. inflation cools in July
Recent data showed that U.S. inflation slowed in July, with an annual price increase of 3.4%, down from 3.5% in June, despite renewed tensions with Iran that led to fluctuations in oil prices. On a monthly basis, prices rose by 0.1% after a previous decrease of 0.4%. While energy prices increased following heightened tensions with Iran, the average fuel prices at stations remained slightly below June levels. Core inflation, which excludes food and energy, rose by 2.5% annually, leaving policymakers divided on raising interest rates at the September meeting, amid a weak labor market that lost 23,000 jobs in July. Markets are betting on a 25 basis point increase—a 50% chance—in September, amid divergent economic data.
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