In July, year-over-year inflation in the United States dropped to its lowest level in over three years, signaling a potential interest rate cut by the Federal Reserve in September. The report from the US Department of Labor revealed a 0.2 percent increase in consumer prices from June to July, marking the mildest inflation figure since March 2021. The slowdown in inflation could impact the upcoming presidential campaign, with inflation being a key focus for former President Donald Trump. However, the data also indicates a positive trend in easing housing costs and slower growth in grocery prices.
Prices Cooling
Over the past year, cooling inflation has provided relief to US consumers affected by price surges in essentials like food and petrol. Core inflation, excluding food and energy costs, increased mildly in July, with economists closely monitoring the trend. The Federal Reserve’s potential rate cut could further reduce borrowing costs for consumers and businesses. As inflation continues to ease, global supply chains stabilize, rental costs decline, and consumer behavior shifts towards more price-sensitive choices.