US consumer prices rose 3.5% annually in June, less than expected as energy prices eased
Energy and gasoline costs drove the biggest monthly decline in four years, easing pressure on the Federal Reserve as core inflation stayed flat.
- On Tuesday, the U.S. Bureau of Labor Statistics reported June inflation cooled to 3.5% year-over-year, prompting traders to slash bets on a Federal Reserve interest-rate hike later this month to about 20%.
- Lower energy costs drove the decline, with gasoline falling 9.7% and fuel oil dropping 9.2% from the previous month, offsetting increases in shelter and food categories.
- U.S. Treasuries rallied on the data, with two-year yields falling 14 basis points to 4.14%, while Bitcoin spiked past $64,000 as risk assets showed immediate relief.
- Fed Governor Christopher Waller said Monday the central bank may need to raise rates in the "near term" if underlying inflation stayed hot, while Fed Chairman Kevin Warsh begins two days of congressional testimony later Tuesday.
- Despite the cooling data, analysts at Capital Economics maintain "it's a matter of when, rather than if, the Fed will raise interest rates," with market pricing suggesting traders are betting on a quarter-point increase by October.
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271 Articles
Inflation eased in June, but U.S. still faces high prices
A report shows inflation eased more than expected in June. It's welcome news for President Trump, who has made lowering prices a focus of his economic agenda. But months of higher-than-expected inflation have continued to squeeze many households and raised questions about when consumers will feel relief. Liz Landers reports on the political pressure the president faces over the cost of living.
Consumer inflation moderates but Middle East conflict threatens rate outlook | Honolulu Star-Advertiser
WASHINGTON >> Consumer inflation slowed more than expected in June as energy prices retreated, but the moderation was insufficient to convince financial markets to take an interest rate increase from the Federal Reserve this year off the table against the backdrop of renewed conflict in the Middle East.
Inflation Posts Biggest Monthly Drop in Four Years
Consumer prices fell sharply in June, posting the largest monthly decline in four years, but economists and federal officials warned Tuesday that renewed U.S. military action in Iran could quickly reverse the progress. The Labor Department reported that prices dropped 0.4% in June compared with May, according to the Associated Press via ABC News. Year-over-year inflation fell to 3.5%, down from 4.2% in May and below most economists’ forecasts. I…
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