Inflation Cools Unexpectedly, Fall Interest Rate Cut On Radar

“Inflation cooled more than expected in June, a welcome sign for the Federal Reserve even as prices remained uncomfortably high for millions of Americans. The Labor Department on Thursday said that the consumer price index (CPI), a broad measure of how much everyday goods like gasoline, groceries and rent cost, dropped 0.1% in June from the previous month. It marked the first monthly decline since May 2020. Prices remain up 3% from the same time last year,” 

The index for gasoline fell 3.8% in June, more than offsetting an increase in shelter. Click here for the press release. High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly devastating for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities and therefore have less flexibility to save money.  

While inflation continues to remain above the Federal Reserve’s 2% annual inflation target, the agency comforted members of Congress that it expects to begin to reduce interest rates in September. (coincidentally for the fall election cycle- editorial note)