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Inflation eases to 3.4% as Fed hikes split

8/12/2026

29 6 Full Breakdown

Summary

Story summary

Inflation eased to 3.4% YoY in July, up 0.1% from June.
Core CPI rose 0.2% in July, remaining 2.5% above a year earlier.
Gasoline averaged $4.04 per gallon, 16 cents higher than June after a 2.9% decline.
Shelter costs increased 0.1% in July, accounting for about two-thirds of the CPI gain.
Federal Reserve’s rate sits near 3.6% while officials split 9-3 on a hike, dropping September odds to 38%.

History

Historical Context

After President Carter nominated Paul Volcker in July 1979, the Federal Reserve raised the federal-funds rate to a 20 % peak in June 1981, pulling inflation from a 14.8 % high in March 1980 down to below 3 % by 1983 while unemployment topped 10 %; today’s 3.6 % policy rate and July’s 3.4 % CPI reflect that measured, gradual approach.

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Story summary

Inflation eased to 3.4% YoY in July, up 0.1% from June.
Core CPI rose 0.2% in July, remaining 2.5% above a year earlier.
Gasoline averaged $4.04 per gallon, 16 cents higher than June after a 2.9% decline.
Shelter costs increased 0.1% in July, accounting for about two-thirds of the CPI gain.
Federal Reserve’s rate sits near 3.6% while officials split 9-3 on a hike, dropping September odds to 38%.

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