STEVE INSKEEP, HOST:
The way you feel about the news on inflation depends on who you are.
LEILA FADEL, HOST:
The latest U.S. numbers showed the inflation rate is coming down. This makes it seem more likely that the Fed can bring interest rates down. And stock markets were up again yesterday.
INSKEEP: Just last week the markets were diving. But that's a distant memory.
FADEL: But high prices are a current reality for many consumers.
INSKEEP: So NPR's Scott Horsley joins us now. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: OK, let's start with the top-line number. What's happening?
HORSLEY: Well, inflation continues to moderate. Consumer prices in July were up just 2.9% from a year ago. That's the smallest annual increase in more than three years. Inflation has come down by more than two-thirds from its peak back when Russia invaded Ukraine. Gasoline prices are actually down in the last year, so our air fares and used cars. And falling inflation is very much what economists have been waiting to see. But White House economist Jared Bernstein concedes we're not yet back to where a lot of average people want us to be.
JARED BERNSTEIN: The momentum is certainly in the right direction. Inflation is reliably coming down, and so this is a consistent trend that's moving in the right direction. No victory laps. We still have to be mindful that too many families are facing too many high costs.
HORSLEY: Bernstein actually gave a speech last month where he talked about the difference between inflation rates and inflation vibes. He knows that a lot of people are still unhappy about high prices, even though those prices are no longer climbing nearly as fast as they had been.
INSKEEP: Yeah, I want to be really frank about this, Scott. When we say inflation vibes, it can imply that people just feel bad about inflation. But for many people, the reality is that prices are still high, right?
HORSLEY: Right. And if you look at the data, housing costs are still going up. People who own a home with a fixed-rate mortgage might be partially insulated from that. But renters, like Teresa Wolf (ph), who lives in St. Petersburg, Fla., have definitely felt a big increase.
TERESA WOLF: First of all, I live with a roommate because I have to. Rents have just skyrocketed. Everyone I know is doing the same thing. And even if you're a homeowner, your insurance has gone up so much. So everybody's now sharing.
HORSLEY: We also continue to hear complaints about grocery prices. Even though supermarket prices have been pretty stable for the last year - they're up just over 1% in that time period - they're up more than 25% since the pre-pandemic era. And Wolf and others are feeling the sting of those cumulative price hikes.
WOLF: I don't buy potato chips anymore. That's moved into the luxury category because they kept raising prices, raising prices, raising prices. And, I mean, I had a heart attack at Publix when it was a bag of tortilla chips - I think it was $7.99.
HORSLEY: Frito-Lay sales actually fell in the most recent quarter, as some customers said enough is enough. Now, I should point out, while grocery prices are up 25% since before the pandemic, average wages are up 23% during that period. So wages haven't quite kept pace, but they are catching up.
INSKEEP: OK, that's a useful bit of news. Now, we'll just remind people that the Federal Reserve takes the lead on fighting inflation. They've kept interest rates high, but everybody's waiting for them to begin lowering them since interest rates could be punishing in their own way. How do they know when they've done enough?
HORSLEY: Well, the Fed is watching the data, and not just the inflation rate but also the unemployment rate, which has been creeping up a little bit. For a long time, the job market was so strong the Fed could really focus on getting inflation under control. Now it has to be careful that those high interest rates don't needlessly put more people out of work. Markets think that inflation has come down enough, so the Fed can start cutting interest rates when policymakers meet next month. And if the job market's looking a little shaky, then those rate cuts might come faster.
INSKEEP: NPR's Scott Horsley. Thanks very much.
HORSLEY: You're welcome.
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INSKEEP: OK, a new round of talks to end the war in Gaza is supposed to begin today in Doha.
FADEL: Yeah, and the talks could hardly be more urgent. The war in Gaza has killed tens of thousands of people. Palestinian families are being displaced repeatedly, and dozens of hostages from Israel are still being held in Gaza. Meanwhile, the United States hopes mediating a cease-fire would also head off a wider war involving Hamas' ally Iran. But it's not clear how this round could possibly work.
INSKEEP: That's the problem. NPR's Kat Lonsdorf is covering this from Tel Aviv. Hi, Kat.
KAT LONSDORF, BYLINE: Hey, Steve.
INSKEEP: OK, so in theory, everybody knows the plan here. President Biden put out a plan in May and everybody's supposed to get together and tweak it, supposedly. What is the plan?
LONSDORF: Yeah, so back on May 31, President Biden laid out this plan that called for a cease-fire, the release of Israeli hostages and Palestinian prisoners and detainees and the reconstruction of Gaza. And it was going to happen in three phases, the first of which would be six weeks long and have a guaranteed and complete cease-fire, while the two sides take those six weeks to hammer out the details of the second phase, essentially. You know, it was a plan that the White House officials back then said Hamas had already accepted and Israel had backed. But, you know, that was more than 10 weeks ago. And several rounds of talks since then have ended at an impasse.
INSKEEP: OK, what are the sticking points in this plan that the two sides supposedly had accepted?
LONSDORF: Well, one has to do with the cease-fire after that first six-week phase. Israel wants the ability to resume the war if it feels that Hamas is prolonging the talks without reaching agreements, and Hamas instead wants a guaranteed end of the war. And there are other disagreements yet to be resolved, including whether Israel can screen Palestinian civilians returning to the north, the number of Israeli hostages to be released, the number and identities of Palestinian prisoners and detainees to be released and who will have control over the Philadelphi Corridor. That's a strip of land along Gaza's border with Egypt that Israel took over in May. I will say that the mediators put out a statement last week saying that they are very aware of these differences and they're ready with a final proposal to bridge these remaining issues, if necessary.
INSKEEP: Now we're getting to the point that makes me feel even more skeptical about these talks - or at least I have questions, as a journalist - because the idea is you get everybody in a room and they talk. Not everybody's going to be in the room to talk. Who will be there?
LONSDORF: Right. So Qatari, Egyptian and American mediators will be there, including CIA chief William Burns and U.S. envoy Brett McGurk. But this is what you're hinting at, Steve. As for Israel and Hamas, Hamas has said it will not participate - basically saying that, you know, they already responded to the U.S.-backed plan with a counterproposal in July and that mediators can use that. I will say the talks are in Doha, where some Hamas leadership is based, so they are close by. And they say that if Israel agrees to that counterproposal, they're ready to talk.
INSKEEP: OK.
LONSDORF: Israel is participating. You know, they sent a high-level delegation to Doha. But Israeli Prime Minister Netanyahu is the one at the end of the day who has to commit to the deal. And for a long time now he's said that he will not succumb to pressure to end the war. He's standing up to his security chiefs here. All of them say that now it's time to strike a deal with Hamas and shift the focus to Iran and Hezbollah. So we're waiting to see if he changes his position at all.
INSKEEP: How does all of this news of peace talks look to people in the war zone, in Gaza?
LONSDORF: Well, the stakes are very high, especially for the more than 2 million Palestinians living in Gaza under dire conditions with daily fatalities from Israeli airstrikes - and also for the remaining Israeli hostages. They're languishing and possibly even dying in captivity in Gaza. You know, these are all people who don't have days and weeks to wait. And then there's this added pressure to this round of talks. After the recent assassinations of a Hamas leader in Tehran and a senior Hezbollah official in Beirut, Israel has been bracing for a vowed retaliation from Iran and its proxies. You know, many are worried about the potential of an all-out regional war. And the U.S. and other international parties are hoping that a Gaza cease-fire deal could convince Iran to hold its fire.
INSKEEP: OK, thanks for a clear explanation, Kat. Really appreciate it.
LONSDORF: Thanks so much.
INSKEEP: That's NPR's Kat Lonsdorf in Tel Aviv. Now, in this country, the protests against the war have claimed the job of another Ivy League university president, Minouche Shafik, who's president of Columbia - or was. The elite New York City university was the scene of protest last spring, prompting the president to call in police. She ended up accused both of tolerating antisemitism and of cracking down too harshly on the protesters. She seemed to have endured the storm until she thought about it over the summer and released a letter yesterday saying she will not return for the new school year. We'll bring you more as we learn it on NPR News.
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INSKEEP: OK, we are following violence on the streets at the capital of Bangladesh, where just 10 days ago, protesters led by students ousted the former prime minister, Sheikh Hasina.
FADEL: It was quite an event. Tens of thousands of people marched onto her residence, and Hasina and her sister were forced to flee in a helicopter to India. So does this mean this revolution, like so many others, is already in trouble?
INSKEEP: OK, so we got one of these internal NPR emails the other day. It was from our correspondent Diaa Hadid, and it's just giving an update on news. And she begins at, greetings from revolutionary Dhaka. (Laughter) And as soon as I read that, I knew that I wanted to talk to Diaa Hadid. And she's on the line. Hi there, Diaa.
DIAA HADID, BYLINE: Hi, Steve.
INSKEEP: So a dramatic moment to be in Dhaka, but I gather it's been a violent day. What's going on?
HADID: Well, today there's been Whac-A-Mole clashes in central Dhaka, and it's happening specifically today because the former prime minister, Sheikh Hasina, called on her supporters to gather around a museum dedicated to her father. Her father is the man that led Bangladesh's independence. But plenty of folks here despise Hasina and they're afraid she's trying to mount some sort of comeback. So men with bamboo sticks - they give a mighty whack - have been attacking suspected loyalists of the former prime minister. And they've also been holding protest marches like this.
(SOUNDBITE OF PROTEST)
UNIDENTIFIED PROTESTERS: (Chanting in non-English language).
HADID: So those protesters are chanting the blood of martyrs won't go in vain. And it's a reference to the hundreds who were killed during student protests that led to Hasina's ouster. But some men also attacked two female journalists who worked for a Western outlet. One of the journalists says they were punched as they tried to leave their car, and one of them also had her phone snatched while she was filming folks who were carrying away a man who appeared to be beaten unconscious. And something similar happened to NPR's producer, Ahmede Hussain (ph). A mob grabbed his phone and deleted footage of them beating up a guy. They returned his phone after they scrolled through and found photos of him kissing his wife. He says the men were embarrassed to see such an intimate scene. It's a conservative country, and he's safe now.
INSKEEP: I'm glad to hear that. What a fortunate turn of events. Can you help us understand, though, why this would've been a showdown, why the people who effectively won, who got control of the government, would choose today to walk around with the bamboo sticks whacking people?
HADID: Because Sheikh Hasina has only issued one statement since she fled power - excuse me. She has only issued one statement since she fled Bangladesh, and that was through her son on Twitter. And she called on her supporters to head to that museum in Dhaka for the commemoration of her father's death, Sheikh Mujibur Rahman. You see, he and most of the family were killed in a coup d'etat on August 15, 1975. Sheikh Hasina and her sisters were abroad and they're the only survivors, so this has long been a day of mourning here. But for many Bangladeshis, they've come to see these commemorations as a way that Sheikh Hasina was shoring up her legitimacy during 15 years of power, power she won in tilted elections. So most of the clashes have been happening around the museum, which was also looted and burnt after she fled. And it gives you a sense of how Bangladeshis are rewriting their own history in real time.
INSKEEP: NPR's Diaa Hadid is in Dhaka, Bangladesh. Thanks very much for the firsthand reporting.
HADID: Thank you so much, Steve. Transcript provided by NPR, Copyright NPR.
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