Inflation showed a slight decrease in July, with the Consumer Price Index (CPI) rising 2.9% year-over-year, down from 3.0% in June. This is the first time CPI has fallen below 3% since President Biden took office.
However, the recent increase in unemployment and global market volatility have raised concerns about a potential recession.
The Federal Reserve opted to keep interest rates unchanged at its last meeting, but experts predict a rate cut in September given the improving inflation picture and rising unemployment.
Read: Inflation Cools Further, Signaling Possible Interest Rate Cuts This Fall
The exact size of the cut remains uncertain, with traders divided between a 0.25% and 0.5% reduction.
Despite the positive news on inflation, the economic outlook remains uncertain. High interest rates continue to impact consumers and businesses, with credit card delinquencies reaching record levels.
The Fed’s actions in the coming months will be crucial in determining the path of the U.S. economy.
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