Featured Macro Insight – Six-Year Low, One-Week Warning: Inside June’s US Inflation Data

Consumer prices actually fell over the month, and the annual pace of inflation cooled by more than economists had pencilled in, reshaping the conversation around the Federal Reserve’s next move just weeks before the July FOMC meeting.

The Consumer Price Index for All Urban Consumers declined 0.4% in June on a seasonally adjusted basis, reversing May’s 0.5% increase and marking the steepest one month decline since April 2020. On an annual basis, headline inflation slowed to 3.5%, down from 4.2% in May and comfortably below the 3.8% consensus estimate that had been building through the quarter. It was the largest year on year moderation in inflation in six years.

Energy did most of the heavy lifting. The energy index fell 5.7% in June, more than offsetting increases in shelter and food. Gasoline prices dropped 9.7% over the month, though they remain up 26.7% over the past year given how sharply prices had risen earlier in 2026 amid Middle East tensions. Electricity slipped 1.0% while natural gas ticked up 0.5%.