- July inflation data suggests the FOMC’s dual mandate may not be in as much of a pickle as economists had previously feared. The CPI rose 0.2% month on month in July. It was 2.7% year on year, the same level as the month before. Core inflation edged up to 3.1%, however, keeping it above the Fed’s 2% target. Flatter headline inflation and falling energy prices bolstered expectations for a September rate cut, though analysts warned that sticky service costs and potential tariff impacts could limit further easing in 2025. Markets rallied on the data, but Fed officials are likely to remain focused on upcoming jobs reports before committing to additional cuts.
July’s inflation report went about as well as the Fed (and the White House) could have hoped for.
