Inflation Slips to 3.4% in July, Dimming Odds of a Fed Rate Hike

U.S. CPI inflation eased to 3.4 percent for the year ending July 2026, down from 3.5 percent in June, the Bureau of Labor Statistics reported August 12. Stocks rose August 13 as investors trimmed bets on a Federal Reserve rate hike. The Fed's preferred PCE gauge (a separate inflation measure) is expected above 3 percent — so a hike is less likely, not off the table.