The Fed's Actions Are Paying More and More, June Inflation Slows Down!

<p>&nbsp;U.S. headline and core inflation data. rose at a slower-than-expected pace in June, potentially strengthening the push for the Federal Reserve to end its monetary tightening cycle after a widely expected interest rate hike at its upcoming policy meeting.</p><p><br /></p><p>The closely watched consumer price index by the Bureau of Labor Statistics rose 3.0% annually, down from 4.0% in May. Economists had predicted an increase of 3.1%.</p><p><br /></p><p><br /></p><p>It was the lowest level in more than two years and represented a sharp decline from the 9.1% level reached last June. On a month-on-month basis, the reading rose by 0.2%, up from 0.1% in the previous month. Estimates have called for 0.3%.</p><p><br /></p><p>Meanwhile, core CPI, which strips out more volatile items such as food and energy, eased to 4.8% annually and 0.2% monthly. Experts' expectations for both measures dropped to 5.0% and 0.3%.</p><p><br /></p><p>While headline inflation is edging closer to the Fed's 2% target, other data have fueled speculation that the central bank will raise interest rates later this month after rejecting a pause in its hike cycle in June. Based on monitoring, there is more than an 88% chance that the central bank will raise borrowing costs by a quarter point at its July meeting.</p>