U.S. Inflation Accelerates in June, Prompting Fed Caution

Inflation rose in June, leading to surprise of several economists and adding pressure for the Federal Reserve to postpone interest rate cuts, as per the recent data from the U.S. Bureau of Labor Statistics.

The consumer price index (CPI), a key indicator of inflation, grew 0.3% from May to June, reversing a smaller increase of 0.1% the previous month. Overall, consumer prices grew 2.7%, up from a 2.4% year-over-year rise in May.

inflation, which excludes volatile food and energy costs, also ticked up. Core CPI rose 0.2% from May and was 2.9% higher than a year ago — signs that price pressures are persisting.

The rise in inflation comes as global duties, including newly proposed 30% tariffs on goods from the EU and Mexico, contribute to the continuing uncertainty on markets. Certain fields, including furniture, appliances, and clothing, are facing upward pressure on prices, likely due to higher import costs.

This tendency may prompt the Fed to maintain its target interest rate range of 4.25%–4.50% when it meets in late July.

With input from Fox Business