{"id":64766,"date":"2026-07-14T09:08:16","date_gmt":"2026-07-14T13:08:16","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-inflation-cools-more-than-expected-in-june-fueling-rate-cut-hopes\/64766\/"},"modified":"2026-07-14T09:08:16","modified_gmt":"2026-07-14T13:08:16","slug":"us-inflation-cools-more-than-expected-in-june-fueling-rate-cut-hopes","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-inflation-cools-more-than-expected-in-june-fueling-rate-cut-hopes\/64766\/","title":{"rendered":"US Inflation Cools More Than Expected in June, Fueling Rate Cut Hopes"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>US headline CPI fell 0.4% in June<\/strong>, significantly lower than the -0.1% forecast, while <strong>annual inflation eased to 3.5%<\/strong> from 4.2% in May.<\/li>\n<li><strong>Core CPI remained flat (0.0% MoM)<\/strong>, missing the 0.2% estimate and bringing the annual core rate down to <strong>2.6%<\/strong>, the lowest level in over three years.<\/li>\n<li><strong>Fed Chair Kevin Warsh<\/strong> signaled a &quot;resolute commitment&quot; to restoring price stability in his first congressional testimony, stating that the inflation surge of the last five years will soon be a &quot;thing of the past.&quot;<\/li>\n<li><strong>Bank of America (<a href=\"\/stock\/BAC\">BAC<\/a>)<\/strong> reported strong Q2 earnings with a <strong>27% jump in net income to $9.1 billion<\/strong> and raised its full-year Net Interest Income (NII) guidance toward the upper end of its 6% to 8% range.<\/li>\n<li><strong>Spot <a href=\"https:\/\/stockmarketwatch.com\/metal\/silver\" data-internallinksmanager029f6b8e52c=\"5\" title=\"silver price today\">silver<\/a> prices surged over 3% to $59.52\/oz<\/strong> following the cooler-than-expected inflation data, as traders reduced wagers on further Fed rate increases this month.<\/li>\n<\/ul>\n<p>The US economy received a significant disinflationary signal on Tuesday as the <strong>Bureau of Labor Statistics<\/strong> reported that consumer prices fell more than anticipated in June. The <strong>0.4% monthly decline in headline CPI<\/strong> was driven largely by a sharp fallback in energy costs, following a ceasefire in the Middle East that helped stabilize global oil markets. On an annual basis, the inflation rate cooled to <strong>3.5%<\/strong>, providing much-needed relief to households and reinforcing expectations that the <strong>Federal Reserve<\/strong> may soon pivot toward easing monetary policy.<\/p>\n<p>Underlying inflation pressures also showed signs of exhaustion, with <strong>Core CPI (excluding food and energy) coming in at 0.0% for the month<\/strong>. This brought the annual core rate down to <strong>2.6%<\/strong>, well below the 2.8% consensus estimate. <em>The &quot;cooler&quot; report has led market participants to aggressively recalibrate their expectations for interest rate hikes<\/em>, with many traders now pricing in a higher probability of rate cuts later this year rather than the previously feared &quot;higher-for-longer&quot; scenario.<\/p>\n<p>In his inaugural appearance before the <strong>House Financial Services Committee<\/strong>, Fed Chair <strong>Kevin Warsh<\/strong> maintained a balanced but firm tone regarding the central bank&#39;s mandate. While he acknowledged that the housing sector continues to lag and household consumption growth is only moderate, he emphasized that the Fed&#39;s primary objective is to &quot;get policy right.&quot; Warsh noted that if the Fed succeeds, the recent era of high inflation will be viewed as a temporary historical anomaly, though he stopped short of providing explicit guidance on the timing of future rate moves.<\/p>\n<p>The banking sector also showed resilience amid the shifting macro backdrop. Bank of America (<a href=\"\/stock\/BAC\">BAC<\/a>) delivered a blowout second quarter, reporting <strong>diluted EPS of $1.21<\/strong> on <strong>$31.6 billion in revenue<\/strong>. The bank saw record equities trading revenue of <strong>$3.6 billion<\/strong> and a <strong>50% increase in investment banking fees<\/strong>. Consequently, management expressed confidence in their outlook by guiding <strong>Net Interest Income (NII)<\/strong> toward the upper end of their previously stated 6% to 8% growth range for the full year.<\/p>\n<p>The combination of cooling inflation and a steady Fed outlook sparked a rally in precious metals. <strong>Spot silver rose over 3%<\/strong>, reclaiming levels near <strong>$60\/oz<\/strong> as the US dollar softened and Treasury yields retreated. <em>Investors appear to be rotating back into yieldless assets<\/em> as the threat of near-term rate hikes diminishes, despite ongoing geopolitical tensions in the Middle East that had previously pressured industrial metals.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways US headline CPI fell 0.4% in June, significantly lower than the -0.1% forecast, while annual inflation eased to 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