One month of moderating inflation is not enough to cause the Fed to pause.

There are many forecasts calling for inflation pressures to ease over the next six months. The July data released last week did reflect a slowdown in the growth of inflation. The Consumer Price Index was unchanged from June. That brought the year-over-year increase down from 9.1% through June to 8.5%. The drop in the total index was a function of the decline in gas prices as supply increased and demand leveled. The core rate increased by 0.3%, well below the 0.7% increase in June and brought the YOY increase down to 5.9%. The peak in the core rate YOY was in March at 6.5%. Inflation began to surge in the second half of 2021.