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June US inflation slowed, but Fed hike option stays open
Underlying inflation eased in June as costs across categories including motor vehicle insurance, communication, apparel, healthcare, and used vehicles declined, Reuters said.
US consumer inflation cooled in June, driven by a retreat in energy prices, but the moderation was not enough to convince markets to rule out a potential interest rate increase this year by the Federal Reserve, according to Reuters via SCMP Economy.
The June CPI release also pointed to underlying inflation subsiding, with declines reported across several categories including motor vehicle insurance, communication, apparel, healthcare, and used cars and trucks, as cited in the report.
In prepared remarks to lawmakers, Fed Chair Kevin Warsh said the central bank has “no tolerance for persistently elevated inflation,” underscoring that policymakers remain focused on getting monetary policy right since taking office in May.
Warsh added that if the Fed sets policy correctly, the report said, the inflation surge of the past five years could be “a thing of the past.”