US Fed's preferred inflation gauge unchanged in July

The US Federal Reserve's preferred inflation metric remained steady in July, according to data released by the Commerce Department on Wednesday. The personal consumption expenditures (PCE) price index increased by 3.7 percent from a year earlier, remaining consistent with the previous month. The index also rose by 0.2 percent compared to the prior month, aligning with expectations from analysts.

The ongoing conflict between the United States and Iran has significantly impacted global energy prices, with Tehran's retaliatory actions blocking a substantial portion of the world's oil and gas supplies. President Donald Trump's economic policies, including tariffs, have exacerbated the affordability crisis since he assumed office, driving prices even higher.

Despite staying steady, Wednesday's PCE inflation data is still near three-year highs. The Republican administration's economic management is expected to be a crucial factor in the upcoming midterm elections in November, as Democrats aim to seize control of both houses of Congress from the GOP. The PCE price index serves as the US central bank's primary gauge of inflation, with the Fed targeting a long-term 2-percent rate.

The Federal Reserve has been falling short of this objective for over five years, but Wednesday's data may provide it with additional leeway to postpone interest rate adjustments during its subsequent meeting in September.