The monthly headline and core US Consumer Price Indexes (CPI) rose 0.2%, cooler than the estimated 0.3%, but are unlikely to change the Federal Reserve Board’s decision on interest rate hikes at their July meeting.
The core and headline numbers came in at their lowest since 2021. Food, the largest driver a year ago, was up only one-tenth of a percent, while housing prices fell 0.4%.
Fed Likely to Remain Hawkish Despite CPI
Annual core inflation rose 4.8%, lower than analysts’ 5% estimate, which is still below the Fed’s 2% target.
While the cooling prices suggest the Fed’s tightening policy may have worked to lower prices, economists agree that a robust US labor market almost guarantees that the bank will increase interest rates for the eleventh time when they meet in two weeks. The central bank started raising interest rates in March 2022.
Hourly earnings rose 0.6% in June, while job US nonfarm payrolls fell, suggesting the jobs market is strong, but slowing. Jobless claims fell in the third week of June. At the time, Fed Chair Jerome Powell said that cooler
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Author: David Thomas
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