US consumer inflation cools to 3.5% in June as fuel prices fall; the core meter will remain flat | Today’s news
US consumer price index (CPI) inflation eased to 3.5% in June from 4.2% a month earlier, helped by a sharp drop in gasoline prices. The decline provides some relief to consumers who have borne the brunt of increased fuel prices amid the Iran-US conflict in the Middle East.
Core inflation, which excludes highly volatile energy and food prices, remained steady in June, easing pressure on the Federal Reserve to raise interest rates further. The annual core inflation rate was 2.6%.
“The energy index fell 5.7 percent in June after rising 3.9 percent in May, 3.8 percent in April and 10.9 percent in March. The energy index was the largest contributor to the monthly decline for all items, more than offsetting increases in other indexes, including the shelter and food indexes,” the Bureau of Labor Statistics report said.
Oil prices have fallen in recent weeks as fears of a supply disruption in the Persian Gulf eased after an interim deal between the US and Iran improved the outlook for oil supplies. In particular, the United Arab Emirates (UAE) has successfully promoted exports by deploying tanker shuttles that operated with their tracking transponders turned off.
Oil prices are recovering, raising inflation concerns again
The easing in headline inflation may prove short-lived as global oil prices started to rise again after falling to pre-conflict levels last month.
The latest rally was driven by renewed hostilities between the US and Iran, with both sides launching fresh attacks against each other that raised fears of disruptions to oil supplies.
Global oil prices climbed to a one-month high, with Brent crude at $86 and US West Texas Intermediate at $80, news agency ANI said in a report on Tuesday.
To make matters worse, US President Donald Trump said on Monday that Washington would restore a naval blockade of Iran, intensifying its battle with Tehran for control of the Strait of Hormuz, a critical maritime hub through which nearly 20% of the world’s oil supplies were transported before a US-Israeli attack on Iran on February 28, 2026.
The US leader also said the US would protect shipping in the strait, but demanded compensation of 20% of all cargo transported.
Trump under pressure as fuel prices rise
After the start of the US-Iran conflict at the end of February, the main driver of overall inflation this year was increased energy prices.
Higher inflation is also emerging as a political challenge for Trump ahead of November’s midterm elections. In an effort to lower fuel costs, Trump has warned US oil companies to lower gas prices at the pumps and ordered the Justice Department to launch an investigation, the news agency said.
