The July inflation readings reduce "the chances that the U.S. central bank would cut rates by half a percentage point" in September.
The tepid gain in the PPE points to “relatively subdued inflation, as most of the increase was driven by volatile categories of goods and services.”
The pick-up in underlying inflation in June "argues against aggressive monetary stimulus from the central bank," an economist says.
The "real" economy won't benefit much from a rate reduction, but the Federal Open Market Committee may have other things on its mind.
Deceleration in consumer spending is expected to curb the increase and keep interest rates unchanged.
“The rebound in productivity is restraining labor costs and keeping inflation in check,” an economist says.
The Fed doesn't see "a strong case for moving [rates] in either direction" amid weak inflation and solid economic growth.
“The economy is in a sweet spot for now," with inflation pressures remaining too weak for the Fed to raise interest rates.
“The uptick in inflation, being largely driven by higher gas prices, is unlikely to worry investors or the Federal Reserve."
The unexpectedly large gain suggests employers "have not let up one bit on their hiring in response to risks out there in the world economy."
The central bank indicated it will slow the pace of interest rate increases in response to changing economic conditions.
The Fed will view the first decline in the CPI since March as "further proof that price pressures are building more slowly than some have feared."
