According to the Labor Department, prices increased by 3% in the year ending in June as a result of the lowest rate of price inflation in a year due to decreased gas prices.
It was the third consecutive month of declining inflation, which relieved household financial strain and may have made it possible for the US Federal Reserve to lower interest rates as early as September.
Since last year, the Federal Reserve’s main lending rate has been over 5.3%, which is a roughly two-decade high.
According to Fed policymakers, rising borrowing costs are having a negative impact on the economy and lessening the pressure on prices to rise.
According to analysts, the most recent report might persuade the bank that it has taken sufficient steps to resolve the issue.
Prices actually decreased by 0.1% in May and June, marking the first clear monthly dip in years.
“The most recent inflation data firmly places us on track for a September Federal Reserve rate cut,” Principal Asset Management’s senior global analyst Seema Shah stated.
The White House, which has battled with broad economic discontent as rising living expenses and interest rates put pressure on consumers, is pleased to see the progress.
