U.S. June Inflation Seen Easing, but Fed Rate-Hike Expectations Persist

U.S. inflation in June is expected to cool, but that may not be enough to rule out another Federal Reserve rate hike this year.

According to Jin10, the report said the ongoing Middle East conflict could limit any relief for households and keep expectations for further tightening in place.

Markets expect the slower rise in the Consumer Price Index to mainly reflect gasoline prices retreating from multi-year highs. However, the report noted that a U.S.-Iran ceasefire agreement collapsed last Friday, and gasoline prices have risen again.

Data from the American Automobile Association (AAA) showed the national average price of regular gasoline rose on Monday to $3.87 per gallon.

Boston College economics professor Brian Bethune said consumers’ pain had only eased slightly, adding that they remained under heavy pressure and that the economy was still far from being out of trouble.

KPMG chief economist Diane Swonk said overall prices were still accumulating upward. She added that even if some supermarkets cut prices to draw consumers back, it would not significantly reduce total household spending because other factors were still pushing costs higher.