US inflation cools to 3.5% in June
Analysis based on 29 articles · First reported Jul 14, 2026 · Last updated Jul 15, 2026
The cooling inflation data reduces immediate pressure on the United States — Federal Reserve to raise interest rates, which is positive for equities and bonds. However, escalating Middle East tensions and rising oil prices threaten to reverse the disinflation trend, creating uncertainty for energy-sensitive sectors and the broader market.
The U.S. Department of Labor reported that the Consumer Price Index dropped 0.4% in June from May, the largest monthly decline in four years, bringing annual inflation to 3.5% from 4.2% in May. Core inflation (excluding food and energy) was unchanged month-over-month and rose 2.6% year-over-year, down from 2.9%. Gas prices fell nearly 20% from their May peak but have rebounded in the past week due to renewed U.S. attacks on Iran and a blockade of the Strait of Hormuz, pushing Brent Crude oil to $87.13. The United States — Federal Reserve remains divided on next steps, with Chair Kevin Warsh testifying before the House Financial Services Committee that the Fed has 'no tolerance' for high inflation. Governor Christopher Waller warned that another hot core inflation reading could necessitate a rate hike. Walmart announced price rollbacks on thousands of items, which President Donald Trump praised. Companies like Apple, Microsoft, and Dell have announced price increases for electronics due to AI infrastructure costs. The United States — Federal Reserve Bank of New York survey indicated nearly half of tariff-affected companies plan further price increases.
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