The Consumer Price Index (CPI) flatlined between June and July as energy prices cooled. Core CPI, which excludes the volatile food and energy sectors, edged up 0.1% during the month. A drop in used vehicle prices and airfares dampened an acceleration in inflation in prescription drugs and medical services.
The overall CPI rose 0.8% from a year ago, a moderation from what we saw in June, while core CPI rose 2.2% from a year ago, which is close to what we have seen in recent months. That will add fuel to the debate within the Fed about the timing on interest rate hikes.