Inflation Accelerates in July, Boosting Rate-Pause Hopes

The Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation gauge, increased to 3.3 percent in July, up from 3 percent previously, indicating the central bank's struggle to bring inflation back to its 2 percent target. Core inflation, which excludes volatile food and fuel prices, also rose to 4.2 percent. While inflation is expected to slow later this year, recent economic data showing strong job market and consumer spending has made Fed officials cautious in declaring victory over inflation. The Fed's upcoming meeting in September will assess whether to raise interest rates or maintain the current stance.