Before the end of the year, we will reach the 2% goldilocks inflation mark, far ahead of schedule:
US inflation is believed to have slowed sharply in June in a further sign of easing price pressuresWhat a wild ride. We went from 9.1% in June 2022 to 3.1% this June in just a year. And without a recession. Though there are caveats of course:
Economists expect used-car prices to keep falling over the coming months. And even housing costs, which have risen significantly, have begun to cool, as apartment construction has reached a four-decade high.
Still, measures of underlying inflation could remain chronically high — well above the Fed's target level through the end of this year, in the view of most economists. Excluding volatile food and energy costs, for example, economists have forecast that “core” prices rose 5% in June from 12 months earlier, down from 5.3% in May but still uncomfortably elevated. From May to June, core prices are thought to have risen by a still-high 0.3%.
The Fed is considered certain to raise its key short-term rate again when it meets in two weeks. It paused its hikes last month after 10 straight rate increases beginning in March 2022. And officials at the central bank have signaled that they could hike rates again when they next meet in September.
But some economists have suggested that if inflation keeps slowing and the economy shows sufficient signs of cooling, the July increase could be the Fed's last.
