The Federal Reserve's July inflation forecast projects headline trailing-12-month inflation will decline to 3.32%, but its preferred core Personal Consumption Expenditures measure is expected to remain sticky at 3.36%. According to the Federal Reserve Bank of Cleveland's Inflation Nowcasting tool, headline inflation is set to fall for a second straight month from a May peak of 4.2%, driven by lower crude oil prices amid U.S.-Iran peace talks. However, core PCE, which excludes volatile food and energy prices, is forecast to edge up from 3.33% in June to 3.36% in July, signaling that war-driven inflation has spread beyond energy. The persistence of core PCE, which stood at 3.4% in May, may force the Federal Open Market Committee to consider further interest rate hikes, potentially weighing on the debt-financed AI infrastructure boom and richly valued stocks.