AUGUST 12, 2023 – INFLATION RISES 3.2 PERCENT IN JULY
Annual inflation for the month of July was reported at 3.2 percent, up slightly from the 3 percent reported in June. Core CPI, excluding food and energy, was up 4.7 percent, down slightly from June’s 4.8 percent. If we look at the monthly increases, both the CPI and the core CPI, were up 0.2 percent in June and July, which indicates inflation is not moving up. With inflation holding steady, the Fed may question the need to raise rates again this year. If examined on a 3-month annualized rate, inflation comes in at 3.1 percent, closer to the Fed’s targeted 2 percent than it’s been in 2 years.
Some Fed officials have been buoyed by this news, and are now questioning the need to raise rates, saying they should pause to examine if current monetary policy is restrictive enough. The Fed next meets on September 19-20, and expectations are for rates to remain the same, but the door remains open for an increase later this year. Most Federal Reserve members have agreed higher rates will likely stay in place for the foreseeable future.