The annual US inflation rate is projected to slow for a second straight month, easing to 3.4% in July 2026 from 3.5% in June and moving further down from the recent peak of 4.2% recorded in May 2023. On a monthly basis, the CPI is expected to increase 0.1%, rebounding from a 0.4% decline in June—the first monthly drop since May 2020. Gasoline prices are anticipated to have fallen by nearly 3%, with additional declines likely in airfares and jet fuel. In contrast, prices for new and used vehicles may edge slightly higher. Core consumer prices are forecast to rise 0.2% after remaining unchanged in June, while the annual core inflation rate is expected to ease to 2.5% from 2.6% in the prior month, which would represent the smallest yearly gain since February. Overall, the CPI report is likely to confirm a continued cooling of energy-related price pressures that intensified in the months immediately after the start of the US war with Iran.