US inflation holds at 3.7 percent in July, above Fed target
Inflation has worsened since the US and Israel attacked Iran, sending energy prices spiralling. Inflation in the United States is holding steady well above the Federal Reserve’s 2 percent target for the 65th straight month, intensifying the debate about whether the US central bank should hold or increase interest rates. The Personal Consumption Expenditures (PCE) Price Index was 3.7 percent in the 12 months through July, unchanged from June, the Bureau of Economic Analysis in the US Department of Commerce said on Wednesday. Economists polled by the Reuters news agency had forecast a reading for the PCE, which the Fed uses to set its benchmark interest rate, of 3.6 percent. The month-over-month figure also came in higher than expected at 0.2 percent after falling 0.1 percent in June, which had been the weakest reading since April 2020.
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Prices ticked up again overnight to $4.10 per gallon (3.8 litres) on average nationally, according to the American Automobile Association. The annual PCE shot to a three-year high of 4.1 percent in May with energy prices spiralling upwards as the conflict closed off roughly a fifth of global oil supplies.
