Consumer price index (CPI) inflation data shows a year-over-year (YoY) increase of 8.5% for the month of July as bitcoin overtakes $24,000.
During the month of June, CPI rose to a fresh 40-year high of 9.1%, largely due to YoY increases in energy and energy commodities. Therefore, investors and consumers alike anxiously awaited this month’s inflation report in order to determine whether or not the Federal Reserve’s continued rate hikes were helping keep inflation under control.
Market expectations widely hoped to see inflation dip from 9.1% to 8.7% YoY. However, following a jolting job report that beat expectations, CPI data has also surprised with a bigger cooldown than expected, falling to 8.5%. Inflation data therefore suggests a possible beginning to the reining in of rampant inflation.
However, the Federal Reserve is still far and away from resolving the issues facing the broader economy as individual sectors, mainly energy, are still wildly above the central bank’s 2% inflation goal. Fuel oil rose 75% and energy commodities and gasoline of all types rose 44%, while the entire energy sector saw a 32% increase. Piped utility gas services suffered a 30% increase.
Moreover, consumers continue to feel the pains of inflation daily, as food prices saw a 13% increase. In spite of inflation data managing to come lower than expected, the central bank, along with the other overseers of the broader U.S. economy, arguably still have quite a lot of work to do in restoring consumer confidence, with sentiment setting record lows in June.
The slight decrease in inflation data may suggest to the Federal Reserve that tighter monetary policy can be maintained, raising the prospects of another aggressive rate hike such as what was seen last month.