Market Cheer: CPI Growth Slows, Fed Chair Powell Reassures
By John Persinos
The nation is dyspeptic about the forthcoming presidential election. Polls show that few Americans want a rematch between Donald Trump and Joe Biden, but it appears that's exactly the contest we're getting for the most powerful job on the planet.
No matter who wins, we seem headed for a "Weekend at Bernie's" presidency. Perhaps instead, a special commission should just pick random names from the phone book.
However, on at least one topic, there's growing optimism: inflation. The tide is finally turning in the battle against rising prices, as underscored by key inflation data released on Thursday.
The beleaguered incumbent in the White House isn't getting much credit for cooling inflation (nor any credit for much else), but decelerating inflation seems here to stay. Investors are cheering, as the main equity indices continue to hit new all-time highs.
The U.S. Bureau of Labor Statistics (BLS) on Thursday released the consumer price index (CPI) for June, showing that the CPI fell 0.1 from May, putting the 12-month rate at 3%, roughly its lowest level in more than three years. The all-items index rate fell from 3.3% in May and was flat on a monthly basis.
Excluding volatile food and energy costs, so-called core CPI climbed 0.1 % monthly and 3.3% from a year ago, compared to respective forecasts for 0.2% and 3.4%. The annual increase for the core rate was the smallest since April 2021 (see chart for a breakdown by categories).
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