An inflation gauge that is closely tracked by the Fed falls to its lowest level in more than 2 years
Shoppers peruse a display of Rainer cherries at a Costco warehouse July 11 in Sheridan, Colo. On Friday, the Commerce Department issues its June report on consumer spending. Prices rose just 3% in June from 12 months earlier, down from a 3.8% annual increase in May, though still above the Fed’s 2% inflation target. Friday’s report from the Commerce Department also showed that Americans’ willingness to keep spending, despite two years of high inflation and 11 Fed rate hikes over 17 months, remains a powerful driver of the economy. This can occur as persistent consumer demand enables more companies to raise prices, thereby keeping inflation above the Fed’s target and potentially causing the central bank to raise rates even higher. At a news conference Wednesday, Chair Jerome H. Powell suggested that the Fed’s benchmark short-term rate, now at about 5.3%, was high enough to restrain the overall economy and probably tame inflation over time.
Headline inflation remained at 2.5pc in January but core inflation rose slightly
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