US Inflation Slows to 2.9% in July

In July, US inflation slowed to 2.9% year-over-year, the smallest annual increase since March 2021, potentially paving the way for the Federal Reserve to cut interest rates next month. Core inflation, excluding food and energy, also eased to 3.2%. The inflation report follows a period of high rates, which have impacted mortgages and loans, and coincides with signs of a cooling labor market. Analysts believe the cooling trend in inflation will keep the Fed on track to reduce rates, which have remained at a two-decade high of 5.3% since July 2023. The easing of inflation is seen as a positive sign for both borrowers and the overall economy, despite ongoing global energy concerns and mixed price changes in areas like food and utilities. This development also plays a significant role in the political landscape, with upcoming elections highlighting economic management as a key issue.