US inflation falls to three-year low

The annual inflation rate in the US was 2.9% in July, the lowest since March 2021, according to Pay on Wednesday. The news will bolster the case for a Federal Reserve rate cut at its next meeting in September and could give a boost to Vice President Kamala Harris' presidential campaign.

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A closer look: Annual core inflation – which excludes volatile energy and food costs – has fallen to 3.2 since June from 3.3, suggesting that pandemic-era supply shortages are continuing to ease. Food prices rose just 1.1 percent last year and gasoline prices fell 2.2 percent.

These trends reflect developments north of the border, where the Bank of Canada was able to begin cutting interest rates for the first time in four years this summer thanks to falling inflation.

The political implications: Falling inflation should generally be good news for American Democrats and Canadian Liberals, since incumbents are usually held accountable for their perceptions of the economy. Justin TrudeauPoll results are so bad At the moment it is difficult to see what, if anything, could alleviate the negative mood around him.

For Kamala Harris, meanwhile, the numbers offer new tailwind as she campaigns for her Introduction of economic policy Speech on Friday.