Rate cuts coming soon – cooling inflation suggests relief for businesses

[Rachel, 7/11/24, Washington Post, “Inflation eased further in June, helping cement path to rate cuts”, https://www.washingtonpost.com/business/2024/07/11/cpi-inflation-fed/, accessed 7/14/2024, LR]

Inflation eased more than expected in June, handing Federal Reserve officials another dose of encouraging data as they inch closer to cutting interest rates and giving long-awaited relief to households and businesses.

Data released Thursday by the Bureau of Labor Statistics showed that prices climbed 3 percent compared with last year, an improvement from the 3.3 percent annual figure notched in May. Prices also fell 0.1 percent over the previous month.

Additionally, a key measure of inflation that strips out more volatile categories such as food and energy rose 3.3 percent over the past 12 months — the smallest annual increase since April 2021.

Joe Brusuelas, chief economist at RSM, summed it up this way: “It’s better than good.”

But housing costs continue to be a major driver of overall inflation and have proved hard to tame since there aren’t enough homes available in America. Overall, shelter costs were up 5.2 percent over the year. But they cooled off compared with the previous month, suggesting long-awaited progress is finally breaking through.