Key U.S. inflation gauge holds mostly steady though core inflation ticks higher

Key U.S. inflation gauge holds mostly steady though core inflation ticks higher Economy Aug 29, 2025 11:14 AM EDT

WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge mostly held steady last month despite President Donald Trump’s broad-based tariffs, but a measure of underlying inflation increased.

Prices rose 2.6% in July compared with a year ago, the Commerce Department said Friday, the same annual increase as in June. Excluding the volatile food and energy categories, prices rose 2.9% from a year earlier, up from 2.8% in the previous month and the highest since February.

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The figures illustrate why many officials at the Federal Reserve have been reluctant to cut their key interest rate. Whil