Falling gasoline prices (down 12.1%), used car prices (down 9.7%) and apparel costs (down 4.5%) put downward pressure on inflation in metro Denver.
FILE – An American flag flies over the Federal Reserve building on May 4, 2021, in Washington. With the end of their two-year fight against inflation in sight, Federal Reserve officials on Wednesday, July 31, 2024, are likely to set the stage for the first cut to their key interest rate in four years. Consumer inflation in metro Denver dropped below 2% in July, entering the Federal Reserve’s comfort zone for the first time since March 2021.
“In many ways, July’s result was the most ‘normal’ inflation reading we have seen since the pandemic began, and could have easily been produced in 2019,” said Douglas Porter, chief economist with BMO, in a commentary. Despite that, the cost of eating out rose 5.7%, reflecting higher labor and lease expenses at restaurants. Shelter costs also continue to outpace overall inflation, rising 3% the past year and 1.2% in the past two months. The flare-up in rents, if sustained, could fuel inflation in the months ahead given the heavy weight shelter costs hold in the index.
“This means for the average American that the Fed will likely cut interest rates next month, which will slightly bring down the cost of borrowing – a good step for auto and home sales, in particular,” Hepp said.
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