14.07.2026 16:50
In the US, inflation fell by 0.4% on a monthly basis in June, while the annual rate came in at 3.5%, below market expectations. Thus, consumer prices in the US recorded a monthly decline for the first time since May 2020. Markets also moved after the critical data. Following the lower-than-expected inflation data in the US, bond yields and the dollar fell, while gold surged sharply.
The US Department of Labor announced the Consumer Price Index (CPI) data for June. Accordingly, the cost of living for American consumers decreased by 0.4 percent in June compared to the previous month. The CPI recorded a monthly decline for the first time since May 2020.
Market expectations were for the CPI to decrease by 0.1 percent monthly in this period. The CPI had increased by 0.5 percent monthly in May. On an annual basis, the CPI rose by 3.5 percent in June. Market expectations were for the CPI to increase by 3.8 percent annually. Annual inflation was recorded at 4.2 percent in May.
ENERGY COSTS FELL
Energy costs decreased by 5.7 percent in June after increasing by 10.9 percent monthly in March, 3.8 percent in April, and 3.9 percent in May. The decline in the energy index balanced increases in other items including shelter and food, becoming the biggest driver of the monthly decline in the CPI. The energy index rose by 15.7 percent annually in June. Shelter costs increased by 0.1 percent monthly and 3.3 percent annually in June. The food index also rose by 0.2 percent monthly and 3 percent annually in the same period.
CORE INFLATION REMAINED FLAT
The core CPI, which excludes volatile energy and food prices, remained flat monthly in June while increasing by 2.6 percent annually. Market expectations were for core inflation to be 0.2 percent monthly and 2.8 percent annually. The core CPI had increased by 0.2 percent monthly and 2.9 percent annually in May.
HOW DID MARKETS REACT?
Following the inflation data coming in below expectations in the US, bond yields and the dollar declined, while gold surged. After the data, the US 2-year bond yield fell about 7 basis points to 4.19 percent, and the 10-year bond yield dropped from 4.61 percent to 4.56 percent. The Dollar Index (DXY) lost 0.5 percent in value. With increased safe-haven demand, gold rose 2.2 percent to above $4,090, testing the $4,100 level during the session. Silver also posted gains. In the markets, it was assessed that the inflation data coming in below expectations, despite the rise in oil prices, eased the pressure on the Fed to raise interest rates.