US Inflation Eases to 3.4% in July, Damping Rate Hike Expectations

The U.S. Consumer Price Index for July 2026 showed annual inflation slowing to 3.4%, down from 3.5% in June, with the all-items index rising 0.1% monthly. Core CPI increased 0.2% monthly and 2.5% annually. This data, indicating a cooling of overall inflation, has led traders to reduce their expectations for a Federal Reserve interest rate hike in September, influencing future monetary policy decisions.