US inflation continued its upward trend in July, with prices rising 2.7% from last year, according to data released on Tuesday. The increase was driven by higher costs for takeout and restaurants, used cars, housing, and medical care.
The latest inflation rate is a departure from the spring’s dip in inflation, which some attribute to Donald Trump’s international tariffs shakeup. Core inflation, excluding energy and food industries, rose 3.1% over the last month, surpassing June’s pace.
Energy prices, however, decreased by 1.6% for the year, stabilizing overall inflation. Economists say it takes time for tariffs to impact consumer prices, but companies have begun passing costs down to customers.
The US Federal Reserve is facing a tight spot, balancing job growth with inflation control. Trump has pushed for rate cuts, citing uncertainty about the tariffs’ effect on prices. The Fed has maintained its stance, amid criticism from the president and economists.
Trump recently attacked Fed Chair Jerome Powell and even considered suing him over renovations to the Fed’s buildings. The latest inflation data may further strain relations between the White House and the Federal Reserve, as the US economy navigates the impact of tariffs on consumer costs and job growth.
Source: https://www.theguardian.com/business/2025/aug/12/inflation-cpi-trump-tariffs