US inflation in July stood at 3.4%, in line with forecasts

A slight slowdown in the pace of inflation in the US has occurred, in line with market expectations. The Consumer Price Index for July rose by 0.1% in monthly terms, matching economists' forecasts, following a monthly decline of 0.4% in June.

Annual inflation in the US stands at 3.4%, following an annual index of 3.5% in June. The core price index in July, which excludes energy and food—particularly volatile items—recorded a monthly increase of 0.2%, and annual core inflation climbed by 2.5% (compared to 2.6% in June).

These data complement the inflation and employment figures for July, the two primary goals of the US Federal Reserve: inflation control and strong employment. The employment report for July, published on Friday, presented a discouraging picture: a surprising decrease of 23,000 jobs against forecasts for an addition of 83,000 jobs. At the same time, the unemployment rate fell to 4.1% from 4.2% in June.

Before the next Fed decision on September 16, the employment report and the inflation figure for August are expected to be released. In its last decision, under Chairman Kevin Warsh, the central bank left the interest rate unchanged for the fifth time in a row at 3.75%.

The decision was not unanimous: 3 members of the Fed's Open Market Committee supported an interest rate hike, given that inflation has been above the Fed's target of 2% for the last five years, while 9 members voted in favor of leaving the interest rate unchanged.

As of this morning, before the publication of the price index, futures gave a 50% chance for a Fed interest rate hike in the upcoming decision. Last week, before the publication of the weak employment report, markets gave a chance of over 60% for an interest rate hike.