US consumer inflation is expected to have slowed in June, but this may offer little comfort to households or rule out an interest rate increase from the Federal Reserve this year, given the ongoing conflict in the Middle East.
Gasoline Prices Retreat
The anticipated moderation in the Consumer Price Index (CPI) would largely reflect a retreat in gasoline prices from multi-year highs, following a fragile ceasefire between the US and Iran last month. However, the truce collapsed, triggering military strikes between the US and Iran, which has led to a rise in gasoline prices.
According to data from the motorist advocacy group AAA, the national average gasoline price rose to $3.87 per gallon on Monday from $3.80 a week ago. President Donald Trump announced that the US would reinstate its blockade on Iranian shipping in the Strait of Hormuz, a vital route for global oil supplies.
Core Inflation Remains Steady
The Labor Department’s Bureau of Labor Statistics is likely to report that the CPI increased by 3.8% in the 12 months through June, with estimates ranging from 3.6% to 4.0%. The core CPI, which excludes the volatile food and energy components, is forecast to have increased 2.8% year-on-year in June after rising 2.9% in May.
Some economists view the moderate increase in the core CPI as a positive sign, while others are less optimistic, pointing to sticky underlying inflation that could keep a rate hike this year on the table.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
