U.S. inflation holds steady in July

News | By Easton Martin | August 12, 2025

U.S. inflation in July held steady at 2.7 percent year-over-year, slightly below economists’ forecasts and unchanged from June, offering a welcome dose of stability for households. Energy prices provided significant relief, falling 1.1 percent in July, with gasoline dropping 2.2 percent and easing the burden at the pump.

The markets responded with optimism, as the S&P 500 reached a record high while the Dow and Nasdaq also gained. Investors cheered the likelihood of a Federal Reserve rate cut in September, with current odds estimated at over 90 percent.

Although core inflation, which excludes food and energy, saw a modest increase, the rise has not overshadowed the positive developments. Steady headline inflation, cooling energy costs, and renewed prospects for looser monetary policy have combined to create a brighter financial outlook. Many see the latest report as a sign that inflationary pressures are easing without derailing economic momentum