The July Inflation Report Is Here, and It's Good News

The July inflation report is here, and it comes with good news.

Inflation fell to 3.4 percent in July, down from 3.5 percent in June. Core inflation, which excludes more volatile categories, also edged down, from 2.6 percent to 2.5 percent. The Consumer Price Index (CPI), which tracks the cost of a broad range of everyday goods and services, rose 0.1 percent from June and was up 3.4 percent from a year earlier.

🚨 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

— Eric Daugherty (@EricLDaugh) August 12, 2026

JUST IN: Inflation eased a bit in July. CPI inflation cooled slightly in July to 3.4% (down from 3.5% in June and 4.2% in May). But beware: Rising gas prices due to the war in Iran remain a key risk.

The monthly gain was +0.1%. Energy costs, restaurant costs and medical… pic.twitter.com/h1LzdlgoG4

— Heather Long (@byHeatherLong) August 12, 2026

Energy prices fell 1.5 percent from June, though they remained 14.7 percent higher than a year earlier. Gasoline prices dropped 2.9 percent over the month but were still up 24.6 percent year over year. Electricity prices edged up 0.1 percent in July and remained about 4.2 percent higher than last year. 

Food prices rose 0.1 percent from June and were up three percent from a year earlier. 

Housing prices also increased 0.1 percent over the month.

The report likely means the Federal Reserve will hold interest rates steady rather than raise them. Inflation has remained above the Fed’s two percent target, while the labor market had appeared resilient for much of the year, conditions that could have pushed the Fed toward another hike. 

Although the Federal Reserve’s primary mandate is controlling inflation, it must also weigh employment conditions. When the economy appears to be overheating, strong job growth combined with stubbornly high inflation can compel the Fed to raise rates. 

July’s report, however, changed that calculation. The economy recorded a net loss of 23,000 jobs: the private sector added roughly 30,000 jobs, but government employment fell by 53,000. Combined with cooling inflation, the weaker jobs picture makes a rate hike less likely. The Fed is now more likely to leave rates where they are. 

President Trump has continued to press for lower rates to unleash faster economic growth, a position that put him at odds with former Federal Reserve Chair Jerome Powell. The new chair, Kevin Warsh, will now face the challenge of balancing those calls for easier money against the Fed’s responsibility to keep inflation under control.

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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