October 23, 2025
American inflation applies only underlying prices

American inflation applies only underlying prices

A woman in a black tank top and black pants holds a shopping basket while shopping for cooking tools
[Getty Images]

The inflation of American inflation stable in July despite import rates, which means that bets are strengthened that the Federal Reserve can lower the interest next month.

The last official figures showed that consumer prices rose by 2.7% in the year to July, the same pace as in June, because lower energy costs compensation price for items such as coffee, tomatoes and tools.

Analysts said the relatively pace of price increases could strengthen the case for the US central bank to lower loan costs to support the economy as the job growth delays.

But an underlying inflation measure – which is seen as a better indicator for economic trends – showed the prices that have been increasing at the fastest pace since February.

The so-called core inflation, which spends food and energy costs, increased by 3.1%, which is the fastest pace in six months, according to the data from Tuesday.

Seema Shah, head of the global strategist at Principal Asset Management, said that she still expected the Federal Reserve to reduce the loan costs in September to boost the American economy.

“There is a sign of tariff pass due to consumer prices, but at this stage it is not significant enough to call alarm bells,” she said.

However, she warned that the decision could become more complicated in the coming months, because companies no longer have any goods they had brought into the country before the rates came into force.

The American Federal Reserve wants to see inflation at 2%.

With the pace above its target, the FED has held the interest rates this year, despite the pressure by President Donald Trump to lower the loan costs, for fear that rates that are taxes on the input, can accelerate prices.

Trump has rejected the concern that the measures will increase prices or weigh on the economy.

He recently dismissed Erika Mcentarfer, head of the Bureau of Labor Statistics after the agency – which also compiled the inflation figures – reported weaker than expected baneng data that caused an alarm about the president’s tariff policy.

On Tuesday he repeated his call to fall the interest rates and he has revived threats against Jerome Powell, the chairman of the Central Bank.

The president threatened to allow a “big lawsuit” against Mr Powell in connection with a renovation of the federal reserve property.

“Jerome” too late “Powell must now lower the rate,” Trump wrote on social media.

The FED was founded by the congress and has powers to determine the policy independent of the White House.

Lindsay James, investment strategist at Quilter, said that the last inflation data was “messy” With figures to support both parties of the debate on whether rates will lead to a significant increase in prices.

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