Inflation eased slightly in July, likely keeping Fed on track to cut rates

Inflation eased slightly on an annual basis in July, as Federal Reserve officials inch closer to interest rate cuts that will take some pressure off the economy.

Data from the Bureau of Labor Statistics released Wednesday showed prices rose 2.9 percent year over year, a slight improvement on the figure notched in June. Prices also rose 0.2 over the previous month.

The report will probably move central bankers closer to cutting interest rates at their next policy meeting in September. For months, Fed officials have said they won’t trim borrowing costs until they’re confident inflation is easing to normal levels. Now that they’ve come about as close as possible, officials are increasingly acknowledging the risks of keeping rates too high for too long. Already, hiring has slowed down, and global markets are jittery over whether the Fed might have put too much pressure on the economy overall.