The US Federal Reserve has nearly ended its rate hike cycle, with annual headline inflation climbing 3.2% in July, down from 9.1% in June and nearing the Fed’s 2% target.

The core personal consumption in expenditures index shows inflation at 4.1%, down from 5.4% in February 2022.

The economy is expected to produce 170,000 more jobs in August, bringing the total to 25 million since the COVID-19 pandemic in April 2020.

Fed Chair Jerome Powell has reiterated the “higher for longer” message, with the dollar expected to gain 2% in August.

Two-year Treasury rates rose the most in two months after Powell’s statements.