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The Consumer Price Index (CPI) for All Urban Consumers rose to 322.561 in June 2025, reflecting a 0.3% monthly increase on an unadjusted basis. This marks the highest monthly gain since January and signals a modest uptick in inflationary pressure, in line with market expectations.
Key Highlights:
- The annual CPI rate climbed to 2.7%, up from 2.4% in May, marking the highest year-on-year increase since February.
- Core CPI, which excludes food and energy, rose 0.3% month-on-month and 3% year-on-year, suggesting persistent underlying inflation.
- Shelter costs continued their steady rise, up 0.3% for the month and 3.9% over the past year.
- Food prices increased 0.3% in June, with dining out costs up 3.8% year-on-year and grocery prices rising 2.2%.
- Energy prices remained volatile: gasoline dropped 2.6% in June and 12% year-on-year, while electricity rose 0.9% for the month and 4.5% annually.
Market Reaction:
- The CPI data supports expectations for a cautious Federal Reserve stance, with analysts predicting rate cuts starting in September if inflation remains contained.
- Equity markets responded positively, with major indices rising on hopes of easing monetary policy.
- Goldman Sachs forecasts core CPI to remain in the 0.3–0.4% monthly range through year-end, barring tariff shocks.
Outlook:
- While inflation remains below peak pandemic levels, the June data suggests the Fed’s 2% target is still a work in progress.
- Investors will closely watch July’s CPI release and upcoming Fed commentary for clues on rate trajectory.
Sources: Bureau of Labor Statistics, Coinlive, US Inflation Calculator, Futunn News, Economic Times Markets
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