The U.S. inflation recorded its smallest annual increase in more than two years in June as price pressure started to slow down in the world’s largest economy.
In June 2023, the consumer price index rose 3% from a year ago, which was the lowest level since March 2021. Meanwhile, prices rose 0.2% in June from a month prior after gaining 0.1% in May. The reading was lower than Dow Jones estimates for 3.1% YoY increase and 0.3% MoM increase.
Still, the positive sentiment from lower prices did not change the market expectation for the Federal Reserve to raise the policy rate in July. CME FedWatch Tool still showed 92.4% odds that the Fed will step back into the hike cycle with a raise of 25 basis points.