BlockBeats message: On August 26, the U.S. 7-month inflation rate unexpectedly remained unchanged at 65 consecutive months clearly above the Federal Reserve’s 2% target. Affected by the Iran war, the recent process of cooling after inflation has risen to high levels has stalled, which may intensify the Fed’s internal tense debate over whether to raise rates or keep interest rates unchanged. Data released by the U.S. Bureau of Economic Analysis on Wednesday showed that the year-on-year U.S. 7-month PCE price index—an indicator the Federal Reserve favors—came in at 3.7%, unchanged from June, versus analysts’ expectation of 3.6%. With trade talks between the U.S. and its second-largest trading partner Canada breaking down on Friday, a new round of tariff-driven inflation pressure may be on the way.

From a month-over-month perspective, the PCE price index rose 0.2% in July, also exceeding economists’ expectations. The index fell 0.1% month over month in June, reaching its lowest level since April 2020. The U.S. Bureau of Economic Analysis also revised its estimate of second-quarter economic growth, keeping the U.S. second-quarter real GDP annualized growth rate unchanged at 1.5%. (Jin10)