US annual inflation dropped to 3% last month, a significant decline compared to the 9.1% spike in June of the previous year driven by surging energy costs—the highest rate since November 1981.

Consumer price inflation in the United States fell further in June. (Photo: Marshall Strategy)

Is this ‘Bidenomics’ effects?

In a published article in CNN Business, US consumer price inflation continued its downward trajectory for the 12th consecutive month in June, hitting its lowest rate since March 2021. This decline offers some relief to consumers who have faced persistent price increases. However, economists caution that core inflation remains a concern, potentially prompting the Federal Reserve to consider raising interest rates.

In June, consumer price inflation in the US dropped further, extending the trend observed over the past year. The latest data reveals that the Inflation slows now at its lowest point since March 2021, providing some respite for consumers who have grappled with rising prices. Despite this positive development, economists are keeping a close eye on core inflation, which remains a worry. The Federal Reserve might weigh the option of raising interest rates to address the prevailing core inflation rate.

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What this implies for the Federal Reserve

As reported in DC News Now, prices growing at a slower rate than in recent months, which is good news for shoppers. Gas prices have fallen dramatically since last year, while food prices have risen. This, according to President Biden, is a good indication for the economy. In fact, in his statement in a published article in the New York Times, he said that Bidenomics in action.

While the drop in inflation is positive, experts stress that core inflation must be addressed. The Federal Reserve could respond to this issue by potentially raising interest rates. Such a decision will have a substantial impact on the economy and different stakeholders, including consumers, businesses, and financial markets.

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