US inflation drops to lowest level in 2 years

The downward trend in consumer prices in the USA continued in June as well.

The consumer price index in the country increased by 3 percent in June compared to the same period of the previous year. The expectation of economists participating in the Bloomberg survey was that the increase would be 3.1 percent.

On a monthly basis, consumer prices increased by 0.2 percent. The expectation for this data was determined as 0.3 percent.

Core indicators are also in line with market expectations. under left.

Consumer prices excluding food and energy increased by 4.8 percent in June compared to the same period of the previous year. Economists surveyed by Bloomberg had expected annual core inflation to be 5 percent.

Monthly core inflation was also recorded as 0.2 percent.

After the inflation data, according to the swap pricing of the Fed’s September meeting, the probability of increasing interest rates by 25 basis points decreased from 25 percent to 16 percent.

Comparison with June 2022 data, where energy prices increased significantly after Russia’s invasion of Ukraine, was effective in the significant decrease in consumer prices. In the coming period, the data will be compared with lower historical figures.

However, the data underscores that since inflation peaked a year ago, progress has been made in reducing price pressures, aided by more than a year of interest rate hikes and reduced demand. Despite this, the inflation rate remains well above the Fed’s target, and policy makers are expected to continue raising interest rates at the July 25-26 meeting.

While a number of Fed officials signaled a possible rate hike at this month’s meeting, they will also consider upcoming data on producer prices, inflation expectations and retail sales.