US Inflation Slows to 3.5% in June as Fed Holds Rates Steady

The U.S. Consumer Price Index rose 3.5% year‑over‑year in June, easing below analysts’ 3.8% forecast. The drop was driven mainly by a sharp decline in gasoline prices, while the core CPI, which excludes food and energy, remained flat. On a month‑to‑month basis, overall prices fell 0.4% as oil prices receded, and the core monthly index showed no change.

The Federal Reserve left its target range for the federal funds rate unchanged at 3.50%‑3.75% after a 9‑to‑3 vote. Three Fed officials voted for a 0.25‑point hike, signaling a split view within the committee. Market participants now price an 81% chance of a rate increase at the September meeting, up from less than 53% a week earlier. The Fed’s communication was notably shorter, offering little forward guidance. Analysts note that the lower inflation reading could influence future policy, while the rate‑hold decision has already affected asset markets, including Bitcoin.