Forex▲ Bullish
US CPI Misses Forecasts; Core Inflation Slows to 2.6%
US inflation slowed more than expected in June, with core CPI unchanged on the month. The data challenge recent Fed tightening expectations.
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US inflation slowed more than expected in June, challenging the recent surge in Federal Reserve tightening expectations. Headline CPI fell 0.4% month on month, slowing from 0.5% in May, while the annual rate eased from 4.2% to 3.5%. Core CPI was unchanged on the month, bringing the annual core rate down from 2.9% to 2.6%. Both headline and core inflation undershot market expectations, suggesting the recent inflation spike was more concentrated in energy than previously feared, traders said.
The improvement was driven overwhelmingly by energy prices. The energy index fell 5.7% month on month after posting consecutive monthly increases of 10.9%, 3.8% and 3.9% over the previous three months, marking the largest monthly decline since April 2020. That more than offset continued increases in shelter and food prices.