Core Inflation Climbs to 2.9% in July, Highest Since February

Core inflation in the U.S. climbed to 2.9% in July, the highest since February, according to the Federal Reserve’s preferred gauge, the PCE index. On a monthly basis, core prices rose 0.3%, while overall inflation including food and energy increased 2.6% annually. Despite rising prices, consumer spending grew 0.5% and personal income rose 0.4%, showing households are still resilient. This strength complicates the Federal Reserve’s job as it balances inflation control with supporting growth. While the Fed targets 2% inflation, markets expect a possible rate cut in September, depending on upcoming labor market data. Trade policies and tariffs are also contributing to inflationary pressures, though July’s breakdown shows services leading the rise with a 3.6% annual increase, while goods grew just 0.5%. Energy costs fell, and food prices rose modestly. Markets reacted cautiously—stock futures dipped, and Treasury yields stayed high—signaling investor concern. Looking ahead, analysts say the Fed’s next steps will hinge on whether inflation stabilizes or accelerates alongside shifts in employment. Overall, July’s inflation report highlights an economy that remains resilient but continues to grapple with persistent price pressures, shaping the Fed’s delicate policy path forward. For more tips on refinancing and home loans, visit Nadlan Capital Group Continue reading on our site: https://www.forumnadlanusa.com/2025/0... #CoreinflationJuly2025 #PCEinflationreport #FederalReserveinterestrateoutlook #U.S.consumerspendingtrends #Servicesvsgoodsinflation