July inflation eases to 3.4% likely keeping the Fed split on interest rates for now

Inflation eased slightly in July, likely bolstering arguments from Fed officials that want to keep interest rates on hold – though tensions with Iran have since reheated, meaning energy prices could drive that figure higher again.The Consumer Price Index rose 3.4% in July over the past 12 months, cooling slightly from 3.5% in June, the Bureau of Labor Statistics said Wednesday.Core CPI – which excludes volatile food and energy prices – ticked down to 2.5% from 2.6% the previous month, still stubbornly above central bankers’ 2% goal.It’s a critical economic reading for the Federal Reserve, after last week’s surprisingly weak labor report gave them reason to hold interest rates in the key 3.5% to 3.75% range. Any indication that inflation is heating up could convince them to hike rates by a quarter point, a position several Fed officials have already backed.Though July’s report showed inflation is slowing from stunning heights above 4% in the spring, consumers are still feeling the pressure as prices outpace wage growth, which rose just 3.2% last month.This is a developing story.Please check back for updates....