War, Tariffs and AI Are Keeping Pressure on Prices as Inflation Remains Stuck at 3.7%
Consumer prices rose 0.2% in July, holding annual inflation at 3.7% and core at 3.3%, as energy costs and wage stagnation pressure the Federal Reserve.
- On Wednesday, the Bureau of Economic Analysis reported that United States PCE inflation held steady at 3.7%, matching June's rate and highlighting the difficult position Fed policymakers face for next month's interest rate decision.
- The Iran War drives energy prices higher, while new United States tariffs and soaring demand for Computer infrastructure add persistent pressure on prices across the broader economy.
- Consumer confidence fell for the second consecutive month in August, according to The Conference Board; Gasoline prices fell 2.7% from July, while Core prices rose 3.3% year-over-year and small electric household appliances jumped 2.2% in one month.
- Fed minutes show Officials remain deeply divided on the future path of United States inflation, while Ken Kim, senior economist at KPMG, warned that broad relief will take time, strengthening the case for rate increases.
- Policymakers expect PCE inflation to decline to 2.3% in 2027 but do not expect to reach the Fed's 2% goal until 2028; Fed Chair Kevin Warsh will discuss these challenges Friday at the Fed's annual conference in Wyoming.
35 Articles
35 Articles
July PCE inflation strengthens the case for a Fed pause
US inflation held above the Federal Reserve’s target in July, reinforcing the case for policymakers to remain patient at their September meeting. The personal consumption expenditures index rose 0.2% from June and 3.7% from a year earlier, both one-tenth of a percentage point above economists’ expectations. Core PCE increased 0.2% for the month and 3.3% annually, matching forecasts. Persistence matters more than surprise The monthly miss was sma…
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War, tariffs and AI are keeping pressure on prices as inflation remains stuck at 3.7%
Inflation remains at 3.7% for the second month, with global conflict, tariffs, and rising demand for technology driving costs higher, according to the Federal Reserve.
NEW YORK, August 27 (Xinhua) -- A supermarket in New York City, August 26, 2026. The Federal Reserve’s closely watched inflation indicator came in slightly above expectations, according to data released Wednesday by the U.S. Commerce Department, while the annual inflation rate...
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