U.S. CPI Posts First Monthly Decline Since 2020; Core Inflation Holds Steady

BlockBeats, July 14 — U.S. consumer prices fell in June for the first time since 2020, while a closely watched gauge of underlying inflation was little changed, easing near-term pressure on the Federal Reserve to tighten policy further. According to U.S. Bureau of Labor Statistics data released Tuesday, the Consumer Price Index (CPI) declined 0.4% from May and rose 3.5% year over year. The core CPI, which excludes food and energy, was unchanged on the month and increased 2.6% from a year earlier. The report pointed to a June drop in gasoline prices as a key driver, offering households some relief as the sharpest effects of the energy-price shock tied to the war in Iran began to fade. Fed officials are likely to take note ahead of the central bank's late-month meeting. Oil prices have moved higher again amid renewed U.S.-Iran hostilities, raising the risk that inflationary pressures from the conflict could persist. After the release, U.S. stock index futures advanced and Treasury yields fell as markets pared expectations for a July rate hike. The data suggested core price pressures were contained, helped by declines in goods prices such as clothing and used cars. Auto insurance premiums also posted a notable drop.