Fed’s preferred inflation gauge cools, adding to likelihood of a September rate cut
By Christopher Rugaber, The Associated Press on July 26, 2024.
WASHINGTON (AP) – The Federal Reserve’s favored inflation measure remained low last month, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates this fall. Prices rose just 0.1% from May to June, the Commerce Department said Friday, up from the previous month’s unchanged reading. Compared with a year earlier, inflation declined to 2.5% from 2.6%. Excluding volatile food and energy prices, so-called core inflation rose 0.2% from May to June, up from the previous month’s 0.1%. Measured from one year earlier, core prices increased 2.6%, unchanged from June. Taken as a whole, Friday’s figures suggest that the worst streak of inflation in four decades, which peaked two years ago, is nearing an end. Fed Chair Jerome Powell has said that this summer’s cooling price data has strengthened his confidence that inflation is returning sustainably to the central bank’s target level of 2%. Lower interest rates and weaker inflation, along with a still-solid job market, could also brighten Americans’ assessment of the economy and influence this year’s presidential race between Vice President Kamala Harris and former President Donald Trump. 6-5
