Inflation milestone, consumer price index, slows below 3% for first time since March 2021. Inflation slowed more than expected in July, with the consumer price index, CPI falling below 3% for the first time in over three years. This milestone could pave the way for the Federal Reserve to cut interest rates next month following a lengthy battle with inflation that drove rates to a 23-year high. The CPI rose 2.9% over the past year, down from June’s 3% increase, according to the latest Bureau of Labor Statistics report. On a monthly basis, prices rose 0.2% rebounding from a 0.1% decline in June. The S&P 500, Dow, and Nasdaq all saw modest gains as investors reacted to the news. which rose 0.4% were responsible for nearly 90% of the monthly price increase. Core CPI excluding volatile food and energy prices, rose 0.2% from June, with the annual rate slowing to 3.2%, the lowest since April 2021. Economists had predicted a 0.2% monthly increase and an annual rise of 3%. Christopher Rupke, chief economist at FDU Bonds LLC noted that while inflation isn’t entirely gone, the balance between falling commodity prices and moderate inflation in services suggests the Fed might now focus more on economic and labor market risks than on inflation. The CPI’s steady decline has reassured the Fed that inflation is moderating. With job growth slowing and unemployment rising to 4.3%, the Fed might soon loosen monetary policy to boost the economy.