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U.S. inflation rate hits lowest point in a year
U.S. inflation hit a year-low at 3% in June, spurring rate cut expectations
U.S. inflation rate drops to 3% in June, lowest in a year
U.S. 10-year Treasury yield falls to 4.20% amid rate cut expectations
Initial jobless claims drop to 222,000, below forecasted 239,000
Fed Governor Cook optimistic about a "soft landing" for the economy
The annual inflation rate in the United States decreased for the third consecutive month in June, reaching 3%, the lowest level since June 2023. This compares with 3.3% in May and falls below the projected 3.1%.
The Consumer Price Index (CPI) dropped 0.1% from May, marking the first decline since May 2020, contrary to expectations of a 0.1% rise. Core inflation also fell, hitting 3.3% annually in June, the lowest since April 2021, down from 3.4% in May. The monthly core inflation rate slipped to 0.1% from 0.2%, under the anticipated 0.2%.
The yield on the U.S. 10-year Treasury note fell 10 basis points to 4.20% on Thursday, its lowest in over three months. The softer inflation figures have bolstered expectations of a Federal Reserve rate cut this quarter.
U.S. jobless claims decline to 222,000
U.S. initial jobless claims dropped by 17,000 to 222,000 in the week ending July 6, below the forecasted 239,000. The four-week moving average of initial claims decreased by 4,000 to 233,500.
Fed’s Cook optimistic on economic outlook
Federal Reserve Governor Lisa Cook expressed optimism about the U.S. economy during a speech in Australia, stating that current data aligns with the possibility of a "soft landing." She noted significant reductions in inflation from peak levels and a labor market that, while cooled, remains robust.
Cook highlighted that the job vacancies to unemployment ratio has returned to pre-pandemic levels, and fewer workers are voluntarily leaving their jobs, indicating decreased confidence in finding better opportunities. "My baseline forecast, along with many outside observers, is that inflation will continue to trend towards the target over time without substantial increases in unemployment," Cook said. She emphasized the Fed’s vigilance regarding unemployment rate fluctuations, assuring that the Fed would respond swiftly to any changes.
UK GDP surpasses expectations with 0.4% growth in May
The United Kingdom's Gross Domestic Product (GDP) grew by 0.4% month-over-month in May, exceeding the forecasted 0.2% increase. This growth was primarily driven by a 0.3% rise in services output, which significantly contributed to the overall GDP increase for the month.
