The U.S. Bureau of Statistics reported on Wednesday that the inflation rate in the United States slightly decreased in July 2026 to 3.4 percent, down from 3.5 percent in the previous month. Prices rose by 0.1 percent in the seventh month of the year compared to the month before.
Inflation excluding energy and food, often referred to as core inflation, registered at 2.5 percent in July, a drop from 2.6 percent in June. Energy prices increased substantially year-over-year by 14.7 percent, continuing a strong upward trend from the 15.7 percent surge seen the previous month. The ongoing conflict in the Middle East, which began at the end of February, is likely continuing to be a key factor driving energy costs. Meanwhile, food prices rose 3.0 percent over the course of the year (3.0 percent in July).
Investors customarily scrutinize U.S. inflation closely because the rate of price increases is a critical indicator for the Federal Reserve’s interest rate policy. Critics argue that high interest rates are detrimental to both the stock market and the housing market, partly because bank accounts remain an attractive alternative investment.
