In a recent report, it was revealed that the US economy has shifted into disinflation mode, with consumer prices rising modestly in June. This increase, however, marked the smallest annual increase in over two years, indicating a further subsiding of inflation. Despite this trend, it is unlikely to dissuade the Federal Reserve from resuming its plans to raise interest rates later this month.
The data suggests that inflationary pressures in the US economy are currently under control. This can be attributed to various factors such as subdued energy prices and a slowdown in global economic growth. As a result, consumer prices have remained relatively stable, providing some relief to American households.
While the decrease in inflation may seem like positive news for consumers, it does raise concerns for the Federal Reserve. The central bank has been striving to achieve its target inflation rate of 2%, and the recent decline indicates a deviation from this goal. As a result, it is expected that the Federal Reserve will continue with its plan to raise interest rates to prevent the economy from overheating.
In conclusion, the US economy has shifted into disinflation mode, with consumer prices rising modestly in June and registering the smallest annual increase in over two years. Despite this decrease in inflation, the Federal Reserve is likely to proceed with its plans to raise interest rates to maintain economic stability. The coming months will be crucial as we observe how these monetary policy decisions impact the overall health of the US economy.
Read more at Reuters
