Published on September 3, 2024 The decline in the inflation rate “paves the way for eMADRID, Aug 30 (EUROPA PRESS) – The United States personal consumption expenditure price index, the statistic chosen by the Federal Reserve (Fed) to monitor inflation, remained unchanged in July at 2.5% year-on-year, the Department of Commerce’s Bureau of Economic Analysis revealed this Friday. The underlying variable, which excludes food and energy prices from its calculation due to their greater volatility, closed the seventh month of 2024 with an increase of 2.6%, also unchanged from the previous month’s figure. For its part, the price of groceries grew by 1.4% and the energy bill rose by 1.9%. In monthly rates, the headline index showed a reading of 0.2% compared to 0.1% in June after increasing by one-tenth, while the underlying rate remained unchanged at 0.2%. To deal with rising prices, the Fed raised interest rates eleven consecutive times starting in March 2022 and stopped this cycle in July 2023. In this way, they are now in the target range of between 5.25% and 5.5%, their highest level since January 2001. At its last meeting on July 31, the Fed chose to maintain the reference rate and indicated that it did not expect it to be “appropriate” to reduce it until it acquired greater confidence that inflation was returning steadily towards 2%. Even so, it stressed that inflation had decreased over the past year and acknowledged that in recent months there had been “more progress” in this matter, although inflation remained “somewhat high”. In any case, she indicated that she would now be attentive not only to the risks on the price side, but also to employment.
The Fed's preferred rate for measuring inflation remains at 2.5% in July
