In June, inflation fell to its lowest annual rate in roughly two years, reports CNBC. The Consumer Price Index reached three percent from a year ago, and on a monthly basis rose only 0.2 percent.
The data indicates that the Federal Reserve now has some leeway to mediate the historically high inflationary period that hit nine percent this time last year, the highest since 1981.
“There has been significant progress made on the inflation front, and today’s report confirmed that while most of the country is dealing with hotter temperatures outside, inflation is finally cooling,” George Mateyo, chief investment officer at Key Private Bank, told CNBC. “The Fed will embrace this report as validation that their policies are having the desired effect–inflation has fallen while growth has not yet stalled.”
Food prices rose only 0.1 percent in June compared to the previous month. This helped to keep overall inflation down, according to the report.
Looking at the core CPI, which ignores food and energy prices that tend to be more volatile, inflation rose 4.8 percent from last year, and 0.2 percent from last month. Mateyo shares that the core value is still higher than the central bank would like, so interest rates are likely to continue to rise. Full Story
Related: White House Comments on June Jobs Report; Certain Food Categories Face Higher Prices