Stocks rise as inflation slows

The Bureau of Labor Statistics released the consumer price index for July on Wednesday, showing that annual inflation slowed from 9.1 percent in June to 8.5 percent in July—bringing it down from a 40-year high. Gas prices were down 7.7 percent but grocery prices were up 1.3 percent. What economists call the “core inflation” level, which excludes energy and food prices, stayed level instead of rising as some had feared. Inflation in July was still up 13.1 percent from a year ago, the fastest annual pace since 1979.

What will the Federal Reserve do? The CME Group, a foreign exchange group, said they now expect the Federal Reserve to only raise interest rates by half a percentage point, instead of three-quarters of a point—the same as the last two hikes. Traders seem to agree: On Wednesday, the S&P 500 rose 2.13 percent and the Dow Jones Industrial Average was up 535 points, a 1.63 percent increase. 

Dig deeper: Read Hunter Baker’s column in WORLD Opinions on the White House’s Inflation Reduction Act.