Here’s another rewritten version with a different structure and a more polished market-reporting tone:
June’s inflation report could prove decisive in determining whether the Federal Reserve moves ahead with a rate increase at its late-July meeting.
U.S. consumer prices cooled much more than economists anticipated last month, reducing market expectations for an immediate Fed tightening move.
The Consumer Price Index (CPI) dropped 0.4% in June, outperforming forecasts that called for only a 0.1% decline and reversing part of May’s 0.5% increase.
Compared with a year earlier, headline inflation rose 3.5%, below the projected 3.8% increase and down from May’s 4.2% annual pace.
The core CPI measure, which excludes food and energy costs, showed no monthly growth in June. That compared with expectations for a 0.2% rise and followed the same increase recorded in May. On a 12-month basis, core inflation advanced 2.6%, below forecasts of 2.8% and May’s 2.9% reading.
Markets reacted positively to the cooler inflation figures. Bitcoin extended its gains, climbing to around $63,400 and rising nearly 2% over the past 24 hours. U.S. equity futures also strengthened, with Nasdaq 100 futures gaining 1.25%.
The softer inflation data also pushed Treasury yields lower. The two-year U.S. Treasury yield fell seven basis points to 4.19%, while the benchmark 10-year yield declined five basis points to 4.56%.
The report was closely watched after Fed Governor Chris Waller recently indicated that he would support a near-term rate increase if core inflation failed to continue easing. Before the CPI release, market pricing for a July rate hike had climbed sharply, with CME FedWatch showing odds reaching 42% compared with just 8% one month earlier.
Investors will now focus on Fed Chair Kevin Warsh’s testimony before Congress for additional insight into how policymakers view inflation trends, economic conditions, and the future direction of interest rates.
