Nick Timiraos said July CPI roughly matched expectations, easing pressure for a
Fed rate hike next month but leaving hawkish voices intact. He noted some Fed
officials still expect inflation to drift back to 2% without further tightening,
while others now favor maintaining higher rates and could join a hawkish
minority if incoming data undermines current projections. Officials attribute
persistent inflation more to external shocks — tariffs, lingering Middle East
energy risks — and a surge in AI-driven demand that is lifting tech-equipment
and software prices, rather than overly loose policy, supporting the view that
current rates may already be restrictive.
