US June inflation slows more than expected due to lower energy prices

This slowdown was primarily attributed to a drop in energy costs, which offset rises in housing and food prices. Analysts had anticipated a larger 3.8 percent CPI. However, concerns remain that this progress could be temporary due to rising oil prices following renewed Middle East hostilities and US President Donald Trump's order to restart a blockade of Iranian ports.

Federal Reserve Chairman Kevin Warsh stated the central bank is committed to tackling the "inflation surge" and will follow data and law in its decisions, despite pressure from President Trump regarding interest rates. The Fed is also monitoring the impact of AI investments on inflation and the job market. Excluding volatile sectors, core CPI rose 2.6 percent year-on-year in June.

White House economic advisor Kevin Hassett described the report as among the best in six years. While a lower underlying inflation reading offers the Fed "breathing room," the sharp reversal in oil and gasoline prices could still lead to a rate hike. The effects of Trump's tariffs and AI buildout on prices were less discernible than expected.

US gasoline costs fell 9.7 percent month-on-month in June, though still higher than a year ago, while food costs climbed 0.2 percent monthly. The Fed's preferred inflation gauge, the Personal Consumption Expenditures price index, is due o