US inflation cools after 41-year high, Wall Street rallies, Australian dollar surges

The Consumer Price Index was flat in July after rising by 1.3 per cent in June, when prices reached an annual rate of 9.1 per cent — the highest in 41 years. .

The US Labor Department said over the year to July, prices rose at the slower pace of 8.5 per cent, better than expected by economists. .

Gasoline prices fell 7.7 per cent in July, but food prices remained elevated, climbing by 1.1 per cent. 

The core consumer price index, which strips out volatile energy and food prices, rose 0.3 per cent in July from June, and 5.9 per cent from a year earlier. 

But he said inflation was still "unacceptably" high and the Fed would continue to need to raise rates likely to between 3.25 per cent and 3.5 per cent this year, and to between 3.75 per cent and 4 per cent by the end of next year. 

Brent crude oil rose 0.8 per cent to $US97.11 a barrel, while spot gold fell 0.1 per cent to $US1791.39 an ounce.