US inflation cools more than expected as gasoline pressures ease
By Benjamin Chiou
Date: Tuesday 14 Jul 2026
(Sharecast News) - The annual rate of consumer inflation in the US slowed substantially in June, according to data out on Tuesday from the Bureau of Labor Statistics, as increases in gasoline prices eased following last month's ceasefire deal between the US and Iran.
The headline year-on-year change in the consumer price index fell to 3.5% last month from the three-year high of 4.2% in May.
This was the lowest since the onset of the Iran war in March and well below the 3.8% reading expected by economists.
The primary reason for the slowdown was the annual increase in energy costs easing to 15.7% from 23.5% in May as crude prices came back down from a four-year high after a temporary truce was agreed between Washington and Tehran as negotiations began.
The drop in oil resulted in gasoline price inflation falling to 26.7% year-on-year from 40.5% in May, while energy prices were broadly steady month-on-month.
Nevertheless, even when excluding more volatile energy and food prices, core inflation slowed more than expected to 2.6% in June from 2.9% in May, below the 2.8% consensus forecast.
The news will be welcome to Federal Reserve policymakers, who are currently grappling with how to address rampant price pressures resulting from the recent spike in energy costs.
Before Tuesday's BLS release, the market was pricing in a two-in-five chance of the Fed raising rates at its next meeting this month.
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