US consumer price inflation decelerated significantly in June, falling to an annual rate of 3.5%, according to preliminary estimates from the Bureau of Labor Statistics.
The reading marks a notable decline from prior months, signaling that the Federal Reserve’s tightening cycle is having a sustained effect on price pressures across the economy.
With headline inflation moving closer to the Fed’s 2% target, policymakers have greater flexibility to cut rates without risking a resurgence of price growth.
The softer inflation print is likely to reinforce expectations that the central bank will maintain its easing trajectory.
With headline inflation moving closer to the Fed’s 2% target, policymakers have greater flexibility to cut rates without risking a resurgence of price growth.
Markets reacted swiftly to the data, with Treasury yields falling and equity indices rising on the prospect of lower borrowing costs.
This development follows a broader global disinflation trend.