Lowest US inflation since 2021

The underlying inflation in the USA fell for the fourth month in a row in July, to the lowest level since 2021. This is a step in the right direction for the Fed to lower the interest rate, says Maria Landeborn, senior strategist at Danske Bank.

» Updated:

» Published:

Lowest US inflation since 2021
Photo: Eduardo Munoz Alvarez AP/TT

Share this article

New inflation figures from the USA strengthen the image that the USA's central bank may lower the interest rate next month.

Inflation according to the KPI measure fell to 2.9 percent in July from 3.0 percent in June, according to the USA's labor market department. The average forecast among analysts was 3.0 percent, according to a compilation made by Bloomberg.

It's positive that it comes a little below expectations. If it had been too low, it could have been interpreted as a decline in demand in the economy, says Maria Landeborn.

"Right direction"

The underlying inflation, which is the measure that the Fed primarily looks at and which excludes food and energy prices, landed at 3.2 percent. It is the lowest level since 2021.

According to Landeborn, the figures mean that the Fed will stick to its previous message that interest rates will start to fall after the summer.

This is a step in the right direction for the Fed to lower the interest rate. The market assesses that the chance is equally great for a double reduction as a single reduction, but I don't think they'll lower 50 points, I think it'll be 25 points. A double reduction would signal concern, and that's what they want to avoid, she says.

Moderate reaction

The rise on the Stockholm Stock Exchange increased marginally after the figures, and the dollar is stable at 10.42 kronor. Short-term market interest rates in the USA rose slightly, and Wall Street is rising in pre-trading.

The decline in inflation follows weak labor market figures from the USA that shook stock exchanges around the world last week.

Before the next interest rate meeting in September, the Fed will also have figures for inflation in August and new labor market figures to consider.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Asian Stocks Rise Following US Fed Interest Rate Cut

Asian Stocks Rise Following US Fed Interest Rate Cut

Blackstone to Invest £90 Billion in UK Projects Over Next Decade

Blackstone to Invest £90 Billion in UK Projects Over Next Decade

Wall Street Mixed as Fed Cuts Interest Rate but Signals Caution

Wall Street Mixed as Fed Cuts Interest Rate but Signals Caution

Fed Lowers Interest Rate by 0.25 Points, Signals More Cuts This Year

Fed Lowers Interest Rate by 0.25 Points, Signals More Cuts This Year

China Urges Tech Giants to Halt Nvidia AI Chip Purchases

China Urges Tech Giants to Halt Nvidia AI Chip Purchases

Jerry Greenfield Departs Ben & Jerry's, Citing Silencing by Unilever

Jerry Greenfield Departs Ben & Jerry's, Citing Silencing by Unilever

Avanza Introduces Digital Trading on London Stock Exchange

Avanza Introduces Digital Trading on London Stock Exchange

Uber Introduces Safari Tours in Kenya's Nairobi National Park

Uber Introduces Safari Tours in Kenya's Nairobi National Park

Swedish Inflation Expectations Rise Slightly in Latest Survey

Swedish Inflation Expectations Rise Slightly in Latest Survey

Sweden's Unemployment Rate Stays High in August

Sweden's Unemployment Rate Stays High in August

Stockholm Stock Exchange Sees Modest Gain Led by H&M

Stockholm Stock Exchange Sees Modest Gain Led by H&M

Verisure Returns to Stockholm Stock Exchange with Major Listing

Verisure Returns to Stockholm Stock Exchange with Major Listing

Oracle and Partners to Acquire TikTok's US Operations

Oracle and Partners to Acquire TikTok's US Operations

Taco Bell to Open First Sweden Location in Stockholm Winter 2025

Taco Bell to Open First Sweden Location in Stockholm Winter 2025

Retail Outlook Brightens as Consumer Spending Set to Boost Economy

Retail Outlook Brightens as Consumer Spending Set to Boost Economy

SBAB Predicts Stable Housing Prices Despite Autumn Interest Rate Cut

SBAB Predicts Stable Housing Prices Despite Autumn Interest Rate Cut

Asian Stock Markets Open Mixed Amid Fed Rate Cut Speculation

Asian Stock Markets Open Mixed Amid Fed Rate Cut Speculation

Microsoft Announces $30 Billion Investment in UK Cloud and AI Infrastructure

Microsoft Announces $30 Billion Investment in UK Cloud and AI Infrastructure

US Stock Market Sees Slight Decline Amid Retail Sales Data

US Stock Market Sees Slight Decline Amid Retail Sales Data

Trump Extends TikTok Deal Deadline to December 16

Trump Extends TikTok Deal Deadline to December 16