Breaking: Inflation Rate Drops, Defying Economist Projections
Inflation in July dipped below what experts predicted.
The 3.4 percent rate for July was below projections of 3.5 percent from experts polled by The Wall Street Journal.
The inflation rate was 3.5 percent in June, the Bureau of Labor Statistics said.
Inflation was at 4.2 percent in May.
Gas prices fell 2.9 percent in July from the previous month, according to CNN.
Although prices rose in the “shelter” category that covers housing costs, the increase was only 0.1 percent in July as prices fell at hotels, motels, and other accommodations.
🚨 JUST NOW: US inflation cools slightly to 3.4% and 0.1% month over month
The likelihood of the Federal Reserve raising interest rates is PLUMMETING
Good! Keep it going and SLASH rates pic.twitter.com/chstGF6w9w
Advertisement - story continues below— Eric Daugherty (@EricLDaugh) August 12, 2026
Grocery prices dropped 0.1 percent in July, posting an overall annual increase of 2.7 percent.
Core CPI, which strips out energy and food costs, rose 0.2 percent in July, which makes its annual rate of inflation 2.5 percent.
The 2.5 percent rate last occurred in January and February and was what CNN termed “a nearly five-year low.”
CNBC reported that stock futures rose in response to the report. S&P 500 Futures rose 0.4 percent, while Nasdaq 100 futures rose 0.9 percent.
The Dow Jones Industrial Average rose 144 points, or 0.3 percent.
Some said the report should delay any interest rate hike from the Federal Reserve.
Under President Trump and Republicans inflation remained low and steady during July.
FOX BIZ: “We’ve tied the lowest year over year print since January.” pic.twitter.com/dv0SpJqfwa
— RNC Research (@RNCResearch) August 12, 2026
“In-line inflation will keep the ‘no need to hike rates’ narrative that took hold after last week’s jobs report intact. There will be another round of inflation data before the September FOMC meeting, so the storyline could still change,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said, according to The Wall Street Journal.
“The July CPI report narrowly meets the bar to nudge the Fed toward holding rates steady at their next meeting in September. Fed policymakers signaled in July that core inflation would have to improve between now and then for them to refrain from raising interest rates,” Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said.
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