US inflation remains above Fed target as economic growth slows

United States inflation remains above the Federal Reserve's 2% target, with the Personal Consumption Expenditures (PCE) index rising 3.7% year-on-year in July. The preferred Core PCE, which excludes volatile food and energy prices, stood at 3.3%, marking 65 consecutive months above the central bank's target.

Concurrently, US economic growth slowed in the second quarter, with GDP increasing at an annualized rate of 1.5%, down from 2.1% in the first quarter. While consumer spending grew at a healthy annualized rate of 3.4%, increased imports—driven partly by demand for AI-related computer chips—weighed on the overall GDP figure.