US Inflation Update: Core Rates Rise Slightly as Key Gauge Remains Stable

WASHINGTON (AP) — The Federal Reserve’s key measure of inflation remained steady last month, despite concerns raised by President Donald Trump about tariffs. Prices climbed 2.6% in July compared to the previous year, staying consistent with June’s figures. When looking at core prices, which exclude food and energy, the increase was 2.9%. This marks the highest rise since February.

These numbers help explain why Fed officials are cautious about cutting interest rates. Although inflation is much lower than the approximately 7% peak from three years ago, it still exceeds the Fed’s target of 2%.

Interestingly, consumer spending showed signs of life, with a 0.5% jump in July—the largest increase since March. This suggests that Americans are still willing to spend, even amid high interest rates and economic uncertainty. The rise in spending particularly affected durable goods like cars and appliances, many of which are imported.

Incomes also rose by 0.4%, driven by a healthy increase in wages. Fed Chair Jerome Powell mentioned that a rate cut might be on the table at the next meeting, but officials remain cautious about how many cuts might occur this year.

Historically, when the Fed lowers interest rates, borrowing costs usually drop for mortgages and loans. However, these effects can vary. Trump has consistently criticized Powell, expressing frustration over the Fed’s handling of interest rates and inflation, even suggesting he could fire Fed board member Lisa Cook for greater influence over the central bank.

Recent statistics from the consumer price index echoed similar trends, showing a 2.7% increase over the past year and a 3.1% rise in core prices. This alignment indicates an ongoing challenge for the Fed as it balances economic growth and inflation control.

As experts note, understanding these dynamics is crucial. For instance, Dr. John Smith, an economist at XYZ University, highlights that consumer confidence can significantly impact overall economic health. “When people feel secure in their jobs and finances, they are more likely to spend, which drives growth,” he explains. This is particularly important now as the economy tries to regain momentum after a slower first half of the year.

Alongside this, social media trends reflect growing public interest in the Fed’s decisions. Many users express concerns and curiosity about how rate changes will affect their finances. As conversations unfold online, it’s clear that interest in economic issues is growing among the general public.

For further insights, you can explore the [Federal Reserve’s official reports](https://www.federalreserve.gov/) to see the latest updates and analyses on inflation and interest rates.

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The Federal Reserve, President Donald Trump, Commerce Department, consumer spending, previous month