Inflation in the United States remained steady at 3.7 percent for the 12 months through July 2026, unchanged from June, according to the Bureau of Economic Analysis in the US Department of Commerce. This marks the 65th consecutive month that inflation has stayed well above the Federal Reserve’s 2 percent target, intensifying debate over whether the central bank should hold or raise interest rates.

Economists surveyed by Reuters had predicted a slightly lower inflation rate of 3.6 percent. The month-over-month inflation figure came in higher than expected at 0.2 percent, reversing a 0.1 percent decline in June, which had been the weakest reading since April 2020.

The inflation persistence has been linked to rising energy prices following attacks by the US and Israel on Iran, which have sent prices spiraling. According to the American Automobile Association, national average gasoline prices increased overnight to $4.10 per gallon (3.8 litres).

Fed funds futures prices indicate about a 42 percent probability of an interest rate hike at the Federal Reserve’s September 15-16 meeting, up from 36 percent before the inflation report. Additionally, data showed that inflation-adjusted incomes have risen just 0.2 percent compared with a year ago, after several months of decline.

Other recent developments include Iran and Oman agreeing on a temporary Hormuz route and Meta reaching a settlement with platform changes in a youth addiction case.

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