TechFlow news, according to Jinshi Data, broad-based cooling in U.S. inflation in June further boosted Federal Reserve officials' confidence that the Fed may cut interest rates soon. Data from the U.S. Bureau of Labor Statistics showed that core CPI (excluding food and energy costs) rose 0.1% from May, the smallest increase since August 2021. On a year-over-year basis, the core index increased 3.3%, also the lowest gain in over three years.
Economists believe the core measure better reflects underlying inflation trends. Weighed down by falling gasoline prices, the overall CPI declined 0.1% from the previous month and dropped 3% compared to the same period last year—the first annual decline since the onset of the COVID-19 pandemic. Following the release of the U.S. CPI data, traders increased bets on European Central Bank rate cuts, now expecting a 20-basis-point reduction in September. Meanwhile, swap markets are pricing in a greater likelihood of Fed rate cuts by the end of the year.
