US inflation steady, tariff fears linger

July CPI Holds Steady Amid Trump’s Tariff Shock

Core inflation accelerates under the trade war

• CPI rose 2.7 % from a year ago, matching June’s rate.
• Excluding food and energy, core CPI climbed 0.3 % month‑on‑month, up from 0.2 %.
• Underlying inflation rose 3.1 % from a year ago, picking up pace.
• Energy and gasoline prices fell, while shelter costs rose.
• Medical care, airline fares and household furnishings increased.

Why analysts are watching the report closely

Trump’s sweeping tariffs ripple through the world’s biggest economy, while the administration has fired the head of the Bureau of Labor Statistics after a jobs report showed lower hiring numbers. Policy makers are balancing the need to support growth against keeping cost increases under control.

Potential impact on Federal Reserve policy

Goldman Sachs analysts note that even a slight acceleration in inflation will not deter the Fed from cutting interest rates soon to boost the economy. The case for rate cuts has become clearer as activity growth and job growth remain below potential.