Overview
- Consumer prices fell more than expected in June, with year‑over‑year headline CPI sliding to about the mid‑3% range and monthly prices showing their biggest drop since 2020, a development reported on Tuesday.
- Financial markets quickly cut the odds of a July rate hike and pushed stocks higher as futures and the CME FedWatch tool priced a much lower near‑term chance of a Fed move.
- Fed Chair Kevin Warsh used his first congressional testimony to warn the public that one month of cooling does not prove a durable slowdown and he gave no clear forward guidance on future rate moves.
- New York Fed President John Williams said inflation has likely peaked and projected it would move toward roughly 3.25% by year‑end on a path back to 2%, while other senior officials urged several more months of confirming data.
- Policy risks remain tilted higher because energy costs could reaccelerate if U.S.‑Iran tensions worsen so markets and the Fed will watch Wednesday's Producer Price Index, upcoming PCE estimates and the July 28–29 FOMC meeting for direction.