The Consumer Price Index rose at a 3.2% annual rate in July, which was a slight increase over June's 3% reading. Typically, that would be associated with a jump in unemployment as businesses and consumers scale back. Yet the unemployment rate has remained below 4% -- low for the U.S. -- since February 2022, and stood at 3.5% as of last month. Others feel the economy remains slow to adjust to higher interest rates, and that the unemployment rate will ultimately rise before the Fed finishes its inflation fight. The current Fed "has been uniquely successful thus far in lowering inflation while leaving the unemployment rate at its lowest levels in roughly half a century," they wrote, with the potential that policy tightening so far "may bring about further declines in inflation without a dramatic rise in the unemployment rate.

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