US CPI falls one-tenth short of expectations

The most anticipated data of the day, the US CPI, showed a slight slowdown in inflation, from the previous 3% to 2.9%, one-tenth less than the 3% expected. The core rate moderated by one-tenth, to 3.2%, in line with expectations.

The U.S. consumer price index (CPI) stood at 2.9% year-on-year in July, implying a deceleration of one tenth compared to previous data and its lowest figure since March 2021, as reported on Wednesday by the Bureau of Labor Statistics of the country's Ministry of Labor.

He underlying indexwhich excludes food and energy prices from its calculation due to their greater volatility, closed the seventh month of 2024 with an increase of 3.2%, a tenth less and the lowest mark since April 2021, reports Europa Press.

For their part, the Food became more expensive by 2.2% year-on-year, while energy was 1.1% more expensive in July than twelve months earlier.

July data could contribute to normalization of monetary policy by the US Federal Reserve (Fed), as it aims to contain inflation, although the Fed's preferred variable for monitoring the cost of living is the personal consumption expenditure (PCE) price index.

In monthly reading, the headline rate of the index rose 0.2% compared to the 0.1% decline in June, while the core rate rose by a tenth and advanced 0.2%.

Monetary policy

The Fed's Federal Open Market Committee (FOMC) decided in late July manage types interest rate in the target range of 5.25% to 5.5%, its highest level since January 2001.

In its statement, the entity stressed that in considering any adjustment to the federal funds rate, the Committee would carefully assess incoming data, evolving outlooks, and the balance of risks.

“The Committee does not believe that it is appropriate to reduce the target range until it has gained greater confidence that inflation is moving steadily towards 2%“, advertisement.

However, the US central bank stressed that inflation fell last year and acknowledged “progress” in recent months, but also that inflation remained “somewhat high.”

The FOMC indicated that the the risks to achieving its employment and inflation targets had increased towards a better balance, even if he warned that the economic outlook was “uncertain” and that he remained very attentive to the risks of both inflation and employment.



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