In June, headline CPI growth in the US fell to 3% from 3.3% in May. This is below consensus expectations and marked another downside surprise after May, Rabobank macro strategists note.
Odds lean toward a Fed rate cut in September
“That closely watched supercore measure posted a second consecutive decline (-0.04% in May and -0.05% in June) leaving the three-month annualized base at 1.3% in June. That’s the slowest reading since October 2021 and just half the pre-pandemic run rate of 2.6%. Easing among basic services components was also broad-based, with transportation and education services seeing monthly declines since May.”
“Energy CPI fell to 1% in June following a second monthly decline in gasoline prices. Food CPI was little changed at 2.2% as the slower grocery CPI reading (1.1%) continued to balance out still elevated inflation for eating out (4.1%). The broader ‘core’ CPI, excluding food and energy, also fell to 3.3% over last year after a smaller monthly increase of 0.1% from May.”
“A second consecutive decline in the US CPI in June has increased market odds for a first rate cut by the Federal Reserve (Fed) this September. After today’s CPI report, we think a rate cut at the next Fed meeting in July remains unlikely, but the odds are leaning towards a cut in September.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
