US June inflation eases, Fed hike risk amid oil price surge

U.S. consumer inflation is expected to have slowed in June, but economists warn the anticipated moderation offers little relief for households and is unlikely to deter the Federal Reserve from considering another interest rate hike this year. The Labor Department is expected to report on Tuesday, July 14, that the Consumer Price Index rose 3.8 percent over the 12 months through June, down from a 4.2 percent surge in May, which was the largest annual increase since April 2023.

The expected slowdown is largely attributed to a retreat in gasoline prices from multi-year highs, following a fragile ceasefire between the United States and Iran last month. However, that truce collapsed last week after commercial tankers came under fire in the Strait of Hormuz, triggering renewed military strikes. Gasoline prices have already reversed course, with the national average rising to $3.87 per gallon on Monday from $3.80 a week earlier, according to motorist advocacy group AAA.

President Donald Trump said on Monday the United States would reinstate its blockade on Iranian shipping in the strategically vital Strait of Hormuz, a move that immediately fueled a surge in global oil prices. Brent...