The inflation figure the government reported Wednesday was down sharply from a 4% annual rate in May, though still above the Fed's 2% target rate. Over the past 12 months, gas prices have dropped, grocery costs have risen more slowly and used cars have become less expensive.
At the same time, underlying inflation remains persistently high and a nagging concern for the Fed, which is all but certain to increase its key interest rate again when it meets in two weeks. The Fed has raised its benchmark rate by a substantial 5 percentage points since March 2022, the steepest pace of increases in four decades.
Yet with most measures of inflation still uncomfortably high, the Fed hardly appears ready to halt its rate hikes. Its expected hike later this month will follow the central bank's decision to pause its rate increases last month after 10 consecutive hikes. The Fed's policymakers have signaled that they could hike rates yet again when they next meet in September.
Used-car prices, for example, have been falling. Automakers are finally producing more cars as supply shortages have abated. New-car prices, too, have begun to ease as a result.
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Source: NBCPhiladelphia - 🏆 569. / 51 Read more »