Investing.com -- The latest data from the Bureau of Labor Statistics reveals that U.S. inflation slowed marginally in June on an annual basis. The U.S. consumer price index rose 3.0% in June, slightly below economists' expectations of 3.1%. The core reading, which excludes volatile items like food and energy, also showed a slowdown, increasing by 3.3% year-on-year.
Analysts at ING noted that the lower-than-expected CPI figures could increase the likelihood of a rate cut by the Federal Reserve, with chances of a September cut on the rise. This could potentially lead to three rate cuts this year, instead of the two cuts currently priced in by the markets.
While the numbers are still above the Fed's target of around 2% for stable growth, Federal Reserve Chair Jerome Powell has hinted at a potential rate cut decision in the near future. Powell emphasized the importance of balancing price stability and full employment goals, indicating that the Fed is closely monitoring both inflation and job market risks.
Expert Analysis Breakdown:
The latest data on U.S. inflation shows a slight slowdown in June, indicating a decrease in pricing pressures. This could potentially lead to a rate cut by the Federal Reserve, with analysts predicting a higher likelihood of three rate cuts this year. While inflation remains above the Fed's target, Chair Jerome Powell has hinted at a potential rate cut decision in the near future, emphasizing the importance of balancing price stability and full employment goals. Overall, these developments could have significant implications for the economy and financial markets, impacting investment decisions and interest rates.