The U.S. inflation rate remained the same from the prior month, but year-over-year inflation increased by 8.5% in July. The core inflation rate was up by 5.9% annually and 0.3% from June to July. Although inflation is cooling down, it remains much higher than the Fed’s 2% target to maintain a healthy economy.
According to market strategists, the Federal Reserve is unlikely to pivot from its hawkish stance anytime soon. As both Consumer Price Index and Producer Price Index soften, markets have started to moderate their expectations for rate hikes. Still, the positive data doesn’t mean it is “mission complete” for the Fed, said Ben Emons, managing director of global macro strategy at Medley Global Advisors.
