Inflation eases in July 2026 to 3.4% annual pace
Good news for your wallet: Inflation cooled off a bit in July 2026, with prices up 3.4% from last year, a smaller bump than we saw in May and June.
Month-to-month, prices barely moved, rising just 0.1% since June after actually dropping between May and June.
Iceberg recall triggers 16% lettuce drop
Grocery bills got some relief thanks to a big more than 16% fall in lettuce prices after a food safety recall on Mexican iceberg lettuce: stores cut prices on other lettuce varieties too, in hopes of wooing anxious shoppers.
Gas also got cheaper in July, but it's still over $1 more per gallon than before the Iran shipping tensions started.
Fed hike odds drop below 40%
Core inflation (which leaves out food and energy) slipped to 2.5% from June's 2.6%.
With this softer report, chances of the Federal Reserve hiking interest rates in September have dropped below 40%, though there's still one more inflation update before any final decisions are made.