Latest news with #consumerpriceindex
Yahoo
3 days ago
- Business
- Yahoo
Inflation rises to 2.7% as companies shift tariff costs to consumers
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Inflation rose last month as companies passed on to consumers the cost of tariffs, affirming a Federal Reserve stance of holding borrowing costs steady this year while assessing the impact from Trump administration changes to trade and other policies. The consumer price index increased at a 2.7% annual rate in June compared with 2.4% the prior month, the Bureau of Labor Statistics said Tuesday, well above the Fed's 2% inflation target. Imported goods led the price gains during June, with apparel, household furnishings and appliances rising 0.4%, 1% and 1.9%, respectively. The report delivered 'a knock-out punch to tariff-inflation deniers,' Pantheon Macroeconomics Chief U.S. Economist Samuel Tombs said in a client note. 'Tariff costs are strikingly visible,' he said, noting that the price of goods excluding food, energy and autos rose 0.5%, the most in three years. The newest sign that inflation persists above the Fed's target prompted traders in interest rate futures to all but rule out a central bank reduction to the federal funds rate during a July 29-30 policy meeting, according to the CME FedWatch Tool. Traders raised odds of no change to 97% from 94% on Monday. The inflation report will probably do little to settle a debate among policymakers over whether import duties will fuel a one-time or sustained increase in price pressures. Price gains in services and other categories remained subdued in June, with airline fares and accommodation prices falling 0.1% and 2.9%, respectively, the BLS said. Rents increased just 0.23%, slightly above the 0.21% gain in May, which was the smallest increase since mid-2011. Also, the price of new vehicles declined 0.3% in June while the price of used cars and trucks fell 0.7%, the BLS said. Fed Chair Jerome Powell and other policymakers have favored resuming cuts to the main interest rate only after confirming that import duties will not trigger higher inflation beyond a few months. 'Continued overall solid economic conditions enable the Fed to take the time to carefully assess the wide range of incoming data,' Boston Fed President Susan Collins said Tuesday in a speech. 'Thus, in my view, an 'actively patient' approach to monetary policy remains appropriate.' At the same time, two Fed governors appointed by President Donald Trump have suggested this month that tariff-induced inflation will pass and expressed openness to considering a reduction to the benchmark rate as early as the next meeting. Trump for weeks has pressured Powell to reduce the federal funds rate, which he says would lead to a reversal in the federal government's mounting borrowing costs. "Consumer Prices LOW. Bring down the Fed Rate, NOW!!!" Trump said Tuesday in a social media post after release of the inflation data. He has repeatedly said Powell should slash the federal funds rate — which now ranges from 4.25% to 4.5% — by as much as 3 percentage points. The call for lower borrowing costs from Trump and White House officials prompted criticism Tuesday from JPMorgan Chase CEO Jamie Dimon. 'I think the independence of the Fed is absolutely critical,' Dimon said after the bank announced quarterly earnings, according to the Wall Street Journal. 'Playing around with the Fed can have adverse consequences, the absolute opposite of what you might be hoping for.'
Zawya
3 days ago
- Business
- Zawya
UK CPI inflation unexpectedly rises to 3.6% in June
LONDON: Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, up from 3.4% in May, above economists' expectations in a Reuters poll for the rate to remain unchanged, official figures showed on Wednesday. British inflation has risen steadily since touching a three-year low of 1.7% last September, and in May the Bank of England forecast it would peak at 3.7% in September - almost twice the central bank's 2% target. June's reading from the Office for National Statistics took the annual CPI rate to its highest since January 2024. Higher transport costs, especially motor fuels, were the biggest contributor to the rise in the inflation rate between May and June, the ONS said. Sterling rose slightly against the dollar after the data, which may put pressure on the BoE not to cut interest rates at its next meeting in August. Previously, April brought a particularly sharp jump in inflation to 3.5% due to rises in regulated energy and water tariffs, a spike in air fares, and upward pressure on the cost of labour-intensive services from a rise in employment taxes and the minimum wage. Despite this, Governor Andrew Bailey has said interest rates are likely to remain on a gradual downward path, as a weaker labour market puts downward pressure on wage growth and the outlook for economic growth remains lacklustre. The BoE has cut interest rates by four quarter-point steps since August and economists polled by Reuters last month forecast two more quarter-point rate cuts this year. However, some BoE policymakers are concerned that skills mismatches in Britain's labour market and other supply constraints will keep wage growth running too fast for inflation to return to target any time soon. Services price inflation, a measure the BoE views as a better guide to domestically generated price pressures than the headline CPI rate, held at 4.7% in June, in contrast to economists' forecasts for it to fall to 4.6%.
Bloomberg
3 days ago
- Business
- Bloomberg
Never Fully Beaten, Inflation Is Coming Back to Life
To get John Authers' newsletter delivered directly to your inbox, sign up here. With new higher tariffs now in force for three months, there was one question that the June consumer price index numbers needed to answer: Are tariffs at last beginning to push up inflation? The answer is an unsatisfying 'probably.' Much remains unclear, and there is plenty to argue about, but the data taken in the large make it impossible for the Federal Reserve to cut rates without a clear improvement.
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
Heard on the Street Recap: Getting Warmer
Inflation picked up in June. The consumer-price index rose 2.7% from a year earlier, accelerating from May's increase of 2.4%. There were signs that tariffs are creeping into consumer prices for goods such as furniture, toys and clothes, which posted larger increases.
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
Canada Inflation Accelerates in June, Likely Keeping Central Bank On Sidelines Again
OTTAWA–Inflation in Canada picked up in June despite only limited signs companies have begun passing tariff costs on to consumers, likely keeping the central bank sidelined for a third policy meeting in a row. The consumer-price index inched up 0.1% for the month and rose 1.9% from a year earlier, quickening from April's steady 1.7% pace, Statistics Canada said Tuesday.
