Year-over-year inflation in the U.S. reached a three-year low in July, rising just 2.9% compared to 3% in June, according to the Labor Department. This slowdown is attributed mainly to easing rental and housing costs and is likely to prompt the Federal Reserve to cut interest rates in September. Despite the cooling inflation, consumer spending remains cautious, with Bank of America CEO Brian Moynihan noting that spending growth has halved from last year. The New York Federal Reserve's Survey of Consumer Expectations indicates a record-low three-year inflation outlook at 2.3%, though short-term expectations remain higher. Vice President Kamala Harris has announced upcoming proposals to further reduce costs and bolster the economy, amidst a backdrop of political debate over inflation management.