Inflation in the U.S. rose at an annualized rate of 3.4% in July, matching the consensus expectation of economists.
The Consumer Price Index (CPI) rose 0.1% in July from the previous month, according to the U.S. Bureau of Labor Statistics.
Excluding volatile food and energy prices, the core CPI rate increased 0.2% month-over-month. The monthly figures were also inline with economists’ forecasts.
The July inflation report likely takes the urgency out of an interest rate increase by the U.S. Federal Reserve, which next decides on rates Sept. 16.
Heading into the July inflation print, futures traders put the odds of a September interest rate hike in the U.S. at 50%, essentially a coin flip.
However, despite matching expectations, inflation in the U.S. remains well above the Fed’s 2% annualized target.
July marked the 64th consecutive month that inflation was above the central bank’s 2% target.
Economists attribute the current elevated inflation reading to higher crude oil prices due to the Iran war.
Brent crude oil, the international standard, is currently trading at $89.24 U.S. per barrel as tensions in the Middle East run high.
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