Member-only story
U.S. Inflation at 2.7%: Tariffs, Fed Policy, and the Ripple Effect on India
Inflation is finally playing nice, and that might be the green light Federal Reserve Chair Jay Powell and his team have been waiting for to end their rate-cut pause.
According to fresh government data, consumer prices rose 2.7% in July year-over-year, almost exactly as economists predicted. This relatively calm inflation trend suggests that U.S. companies have — so far — avoided fully passing on the costs of President Trump’s tariffs to shoppers. It’s exactly the kind of sign the Fed wanted before deciding whether to lower borrowing costs again.
Not Quite an Inflation Paradise
While food prices remained flat and energy costs dropped, the core inflation rate — which excludes food and energy — rose 0.3% in July, marking a six-month high.
Imported goods saw noticeable price jumps, hinting that tariffs aren’t entirely harmless:
- Furniture and car parts prices rose.
- Dental care prices increased 2.6% in July.
- Medical care prices climbed 0.8%.
- Airfares spiked 4% from June — the largest monthly jump in over three years after months of decline.
