July inflation eases to 3.4%, still above Fed’s 2% goal

Inflation cooled slightly in July, falling to 3.4% from June's reading, a drop of one-tenth of a percentage point. The figure remains well above the Federal Reserve's 2% target.

The slight decline effectively rules out a rate increase at the Fed's next policy meeting, though officials have long noted that the final stretch of taming inflation tends to be the most difficult.

Economic analysts also pointed to a narrowing of the so-called K-shaped economy, in which different income groups have experienced diverging financial fortunes during the recovery.

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