U.S. Consumer Price Index Dips into ‘Deflation’, Potentially Signalling Rate Cuts Ahead

The latest report shows consumer inflation, as measured by the Consumer Price Index (CPI), has slipped into ‘deflation’ territory on a month-to-month basis. For the first time since May 2020, CPI inflation fell by 0.1% in June, coming in below analyst expectations. The likelihood of a rate cut at the Federal Reserve’s July meeting has nearly doubled to 9%. Additionally, markets are now pricing in an 83% chance of at least one rate cut by the September meeting.