AI inflation is putting even more pressure on the Fed. Could higher interest rates be next?

One thing the Federal Reserve could always count on to keep inflation low was falling prices for computers, cell phones and other high-tech stuff — but not anymore.

Stocks rose and bond yields fell sharply Thursday morning after a fresh read on business inflation showed prices were broadly flat in July.

US wholesale inflation decelerated in July by more than estimated as energy and food costs fell, likely giving the Federal Reserve more time to assess price pressures at upcoming meetings. Initial jobless claims rose by 9,000 in the week ending August 9. Bloomberg's Michael McKee reports. (Source: Bloomberg)

Electricity, mortgage rates and home-heating oil all rise in cost in July

The drop suggested the Fed and its new chairman Kevin Warsh (pictured) will keep US interest rates in the range of 3.5% to 3.75% next month.

The Reserve Bank has kept interest rates on hold at its August meeting, after three rate hikes earlier this year.