CPI, Fed and June
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The June inflation data is likely to keep Federal Reserve officials cautious, open to cutting interest rates later this year without committing to any course of action. The consumer-price index wasn’t
The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.
Stocks tiptoed toward fresh highs, then got cold feet. A glimmer of hope from Nvidia’s China chip sales briefly lit the room, but cooler-than-hoped inflation doused the mood.
The latest Consumer Price Index (CPI) data came in hotter than expected, with inflation rising 2.6% in June, higher than the 2.4% seen in May but lower than the 2.7% economists expected. Investors weigh whether President Trump's tariff policy is fueling inflation in the US economy and what it means for the Federal Reserve.
The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.
Both the S&P 500 (.SPX) and Nasdaq (.IXIC) - and by extension, MSCI's world equities index (.MIWD00000PUS) - retreated from record peaks after traders shaved back bets of U.S. rate cuts this year as prices rose for things such as coffee and couches, while staying steady for tariff-exempted (for now) items such as cars.
For much of this year, bond investors were all but certain that the Federal Reserve would resume cutting interest rates by September. Most Read from BloombergWhy Did Cars Get So Hard to See Out Of?How German Cities Are Rethinking Women’s Safety — With TaxisPhiladelphia Reaches Pact With Workers to End Garbage StrikeLately,
June's uptick in consumer prices likely gives the Fed room to stay on hold as uncertainty over tariffs clouds the timing of its next rate cut, according to economists.
The Consumer Price Index in June rose 2.7% on an annual basis, a sign inflation around the U.S. is creeping up after declining earlier this year.
The CPI rose 0.3% month-over-month in June, accelerating from May’s 0.1% pace. Year-over-year inflation also jumped to 2.7%, up from 2.4% in May. Core CPI, which excludes food and energy, rose 0.2% in June and came in at 2.9% annually — signs that underlying inflationary pressure remains sticky.