According to the latest economic data, the inflation level in the US for July has still not reached the Fed's target of 2%, which poses new challenges for the upcoming monetary policy decision in September.

The report released by the Bureau of Economic Analysis of the U.S. Department of Commerce shows that the Personal Consumption Expenditures (PCE) price index rose 2.6% year-on-year in July, unchanged from June. More importantly, the core PCE index, excluding food and energy prices, rose 2.9% year-on-year, an increase from 2.8% in June. This data is generally consistent with economists' previous forecasts.

Despite the ongoing inflationary pressures, Fed Chairman Powell previously hinted that considering the cooling labor market, the first interest rate cut of the year might be considered at the September meeting. However, the current inflation data may impact this decision.

Market analyst Matt Grossman pointed out that this data highlights the complexity of the Fed's formulation of monetary policy in the current economic environment. On one hand, inflation remains above target levels; on the other hand, signs of slowing economic growth are becoming increasingly apparent.

In this case, the Fed needs to find a balance between curbing inflation and supporting economic growth. Economic data in the coming weeks will be a key factor in determining the direction of monetary policy in September. Regardless of the final decision, market participants will closely monitor every move of the Fed to assess its potential impact on the economy and financial markets.