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Key US inflation gauge stable, paving way for lower Fed rates
The Straits Times
|September 01, 2025
But it remains unclear if price hikes from Trump's tariffs will become persistent
The US Federal Reserve's preferred measure of inflation stayed steady in July, keeping the central bank on track to begin lowering interest rates as soon as its next meeting in September.
Consumer prices rose 0.2 per cent in July and were up 2.6 per cent from a year earlier, according to the personal consumption expenditures price index released by the US Commerce Department on Aug 29. That was the same annual pace for the previous period.
Core prices, which exclude volatile food and energy costs, and are seen as a more reliable gauge of underlying inflation, rose 0.3 per cent from the previous month. Compared with the same time in 2024, those prices were up 2.9 per cent, slightly higher than June's year-over-year increase.
US President Donald Trump's tariffs have started to push up consumer prices, but what is not yet clear is how much further they are set to rise and whether this will lead to a temporary burst in inflation or something more persistent.
This story is from the September 01, 2025 edition of The Straits Times.
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