With all eyes on the country’s economy, US Inflation has fallen to 2.9% in July 2024. Indeed, the number is a focal point after jobs data sparked concern and a global sell-off last week. Subsequently, all eyes are on where inflation stands, and how the country’s central Bank will respond.
Despite panic over a potential recession, the Federal Reserve has kept interest rates at a 23-year high amid its ongoing inflation fight. The Fed has stood firm by its 2% inflation target. With its wait-and-see approach, the market is expecting those cuts to come next month.
Also Read: US Economy Is Slowing Down, Showing Signs Of A Possible Decay
Inflation Stays at 2.9% as Market Awaits Fed Rate Cuts
Throughout the year, the US economy has been in a fragile state. Inflation has not retreated as well as many hoped, and its placed the Federal Reserve in a rather difficult position. That all came to a head in early August, when a stock market crash took place, wiping out $2 trillion in funds.
With global market’s carefully watching this week’s data, US inflation has fallen to 2.9% for the month of July 2024. The figure is lower than expected, and down from June’s number. However, it is still far from the Fed’s target number. Thus, creating some concern about the long-awaited interest rate cuts.
Also Read: US Economy: What Will Happen If the Federal Reserve Doesn’t Cut Rates Soon?
“An unexpected upside surprise to inflation would likely cause the largest market reaction,” a Citigroup analyst told the Financial Times. “Including a move higher in yields pricing out some of the substantial rate cuts now expected from the Fed this year.
The Federal Reserve refused to act amid the August 5th global market meltdown. The development saw Japan’s stock market suffer its greatest daily loss ever. However, the central bank is projected to finally cut rates in September. Currently, CME Group’s FedWatch Tool shows a 52% chance they institute a 25 basis point cut in the coming month.