In July, the rate of inflation was less than expected.
The year-over-year rate of inflation dropped from its June peak. A survey of 44 economists that predicted a rate of 8.7% was the lowest estimate.
The decline in gas prices is one of the reasons for the slowing rate of inflation. Shelter and food prices are still elevated. The price of food increased by 1.1% in July.
Greg McBride, chief financial analyst at Bankrate.com, said that it might be premature to say that inflation has peaked.
He says that to feel like we have hit a peak, we need a sustained decline in a broad range of categories. Food prices are up at the fastest pace in 43 years, with some of the sharpest increases in categories like necessities continuing. With rents lagging the increase in home prices, the continued upward pressure from shelter costs is likely to linger for some time.
The Labor Department shows how much prices have gone up over the past year.
Four rate hikes have been implemented by the Federal Reserve in order to reduce inflation to 2%. 2.5% is the federal funds rate.
Economic growth can be slowed down by these hikes. Debt servicing costs will increase for things like credit cards.
Another interest rate hike is almost certain when the Fed meets in September. It's not clear whether those rate hikes will be.05% or 0.05%.
He says that whatever progress has been made needs to be sustained a month from now. This will be quickly forgotten if this isn't done. I don't think it's a good idea to change the Fed's forecast based on a number that won't be repeated in a month.
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