The Federal Reserve’s favored inflation measure remained low last month, pointing to cooling price pressures and paving the way for interest rate cuts this fall. Inflation rose just 0.1% from May to June, with core inflation increasing 0.2%. Fed Chair Jerome Powell is confident that inflation is returning to the target level of 2%, likely leading to a rate cut in September.
Despite steady economic growth, concerns remain over high costs of essential items like groceries and rent. Inflation peaked at 7% in 2022 but has since steadily declined. The Biden-Harris administration faces criticism for its handling of the economy. The U.S. economy grew at a healthy 2.8% rate in the second quarter, with job growth mainly in healthcare and government sectors.
With the unemployment rate at a low 4.1%, the Fed is expected to cut interest rates next month to stimulate economic activity. The upcoming presidential race between Kamala Harris and Donald Trump could be influenced by lower interest rates and inflation, shaping the economic landscape for the future.