U.S. consumer prices fell 0.4% MoM in June — the first monthly drop since 2020 —
and rose 3.5% YoY, the Bureau of Labor Statistics said Tuesday. Core CPI (ex
food and energy) was unchanged MoM and rose 2.6% YoY. The report said a retreat
from the peak energy-price shock linked to the Iran war drove gasoline lower,
while declines in apparel and used-car prices and a large drop in motor-vehicle
insurance restrained core inflation. The print eases some near-term pressure on
Fed tightening ahead of the Fed’s month-end meeting; investors pared bets on a
July rate hike, U.S. equity futures rose and Treasury yields fell. Renewed
U.S.-Iran hostilities lifting oil prices could, however, prolong conflict-driven
inflationary effects.
