US inflation falls to 3.4% in July

{"text":[[{"start":8.85,"text":"US inflation edged lower to 3.4 per cent in July as petrol prices declined, even as the fallout from President Donald Trump’s war in Iran continued to reverberate across the economy. "}],[{"start":21.049999999999997,"text":"Wednesday’s consumer price index figure from the Bureau of Labor Statistics was down from an annual rate of 3.5 per cent in June and 4.2 per cent in May. It was in line with the expectations of economists polled by Bloomberg."}],[{"start":34.849999999999994,"text":"Core inflation, which strips out volatile food and energy costs, fell from 2.6 per cent to 2.5 per cent, suggesting underlying price pressures remained contained."}],[{"start":45.24999999999999,"text":"“The overall inflation picture improved marginally for the second month in a row in July, as gasoline and fuel prices declined,” said Brian Bethune, an economics professor at Boston College."}],[{"start":null,"text":"

"}],[{"start":56.8,"text":"The data comes as the Federal Reserve has faced growing calls to raise interest rates to tame a bout of inflation driven by the war’s disruption to energy supplies and price pressures from tariffs and the AI boom."}],[{"start":68.95,"text":"But following the data release, traders pulled back expectations of near-term action by the central bank, no longer fully pricing in a rate increase before the end of the year. Before the data, at least one quarter-point increase was expected by December."}],[{"start":84.7,"text":"Robert Tipp, chief investment strategist at PGIM, said that with data showing inflation cooling, “you have to think that expectations of hikes will keep getting pushed out”."}],[{"start":94.95,"text":"Petrol prices, one of the most visible signs of rising prices for Americans, surged to an average of $4.65 a gallon in May at the height of the Iran conflict, according to BLS data, pushing inflation that month to a three-year high."}],[{"start":110.2,"text":"But prices have since dropped as tensions between the US and Iran receded. The monthly average hit $4.09 a gallon in July. "}],[{"start":null,"text":""}],[{"start":120.10000000000001,"text":"Following the publication of Wednesday’s report, the US dollar and Treasuries initially fell before recovering ground to be stronger on the day. The S&P 500 closed a quarter point higher."}],[{"start":131.95000000000002,"text":"Alongside the dip in interest rate expectations, the moves underscore investor concerns that the Fed will be unable to tame price pressures."}],[{"start":140.00000000000003,"text":"“We are seeing progress in the right direction [on inflation], but we are not yet at the point where the underlying trend is returning to the Fed’s target sufficiently,” said Josh Hirt, senior US economist at Vanguard. "}],[{"start":152.75000000000003,"text":"Fed chair Kevin Warsh has signalled his intent to be decisive in cracking down on inflation but has not raised rates at either of his first two meetings at the helm of the central bank."}],[{"start":165.20000000000002,"text":"Energy costs in July were up 14.7 per cent on an annual basis, compared with 15.7 per cent in June. Housing-related costs were up 3.2 per cent, down from 3.3 per cent the previous month, with the price of lodging away from home dropping as World Cup travel came to an end. "}],[{"start":185.95000000000002,"text":"The pace of increases in food costs held steady at 3 per cent. The price of lettuce fell by a seasonally adjusted 16.4 per cent on the previous month, however, as an outbreak of the cyclospora parasite in many states knocked demand."}],[{"start":201.4,"text":"Atsi Sheth, chief credit officer at Moody’s Ratings, said the continued modest decline in core inflation, which has fallen from a peak of 2.9 per cent in May, “keeps a 2026 rate hike on the table while lowering the odds of an imminent move as soon as September”."}],[{"start":218.4,"text":"But she cautioned that the war in the Middle East could still cause price pressures to reignite. “Energy remains the wild card, and food prices are still exposed to supply shocks, both of which could push up headline inflation going forward,” she said. "}],[{"start":239.7,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786577415_4084.mp3"}