US Inflation Rate Falls to 3.5% in June Amid Energy Price Declines
The US inflation rate decreased to 3.5% in June 2026, down from 4.2% in May, primarily due to falling energy costs, but concerns linger over potential price increases linked to ren
By BBC News
The US inflation rate fell to 3.5% in June 2026, a decrease from 4.2% in May, as reported by the U.S. Bureau of Labor Statistics (BLS) on July 14, 2026. This decline was largely attributed to a drop in energy prices, including gasoline, which saw a significant decrease of 9.7% last month. However, the situation remains precarious due to renewed military actions in the Middle East, particularly involving Iran, which have caused oil prices to surge again. The price of Brent crude oil rose by $10 in just 24 hours, reaching $87 per barrel.
Kevin Warsh, chairman of the Federal Reserve, emphasized the central bank's commitment to controlling inflation, stating, "We monetary policymakers need to choose lower prices and that's the commitment my colleagues have made." Analysts warn that inflation could rise again in the coming months, potentially influencing the Federal Reserve's decisions on interest rates. Scott Anderson, chief US economist at BMO Capital Markets, noted that while energy prices had previously declined, the renewed conflict in the Gulf could lead to a rate hike later this year.
Despite the overall decline in inflation, core inflation, which excludes food and energy prices, remained unchanged at 2.9% in May, above the Federal Reserve's target of 2%. This figure will be closely monitored as the Fed considers its monetary policy moving forward. Federal Reserve governor Christopher Waller indicated that if core inflation readings remain high, the Federal Open Market Committee may need to tighten monetary policy soon.
As of Tuesday, the national average gasoline price had risen to $3.86 per gallon, up from $3.79 the previous week, indicating that prices are already climbing back above June levels. The next Consumer Price Index update is scheduled for August 2026, which will cover July data and could provide further insights into the inflation trajectory.