Federal Reserve policymakers are likely to feel little fresh urgency to raise interest rates in September after data on Wednesday showed inflation cooled on a year-over-year basis for a second straight month, but they may take little comfort that monetary policy is tight enough to continue the easing trend. The Consumer Price Index rose 3.4% in the 12 months through July, down from 3.5% in June, the Bureau of Labor Statistics reported, in line with economists' expectations. Excluding the volatile food and energy components, the so-called core CPI increased 2.5% in the 12 months through July after climbing 2.6% in the prior month. Underneath the hood, there were some indications of broadening inflation.
A sharp drop in hotel prices - unlikely to be sustained - drove much of the month-over-month easing in core inflation, and there were more categories of core goods that saw prices increasing than in June, said Omair Sharif, the founder of Inflation Insights. Technology prices, driven by demand for artificial intelligence, jumped. Gasoline prices fell, pushing down on overall inflation.
