Market Overview

Inflation (the rate at which consumer prices rise) fell to 3.5% annually in June, well below the 3.8% economists expected and down from a bruising 4.2% in May, according to the Bureau of Labor Statistics — the first deceleration since January. The hero of the report was energy, with the index dropping 5.7% in the month, its steepest fall since April 2020, driven by a temporary easing of U.S.-Iran hostilities that dragged oil from above $90 to roughly $73 a barrel. Core inflation (which strips out volatile food and energy) came in flat month-over-month at 2.6% annually, handily beating forecasts — services costs, the Fed's preferred longer-run gauge, were essentially unchanged. The relief may be fleeting: the ceasefire is already fraying, oil has climbed back toward $86, and Fed Chair Kevin Warsh made clear he sees no

The same June CPI report that offered inflation relief comes loaded with an asterisk: the U.S.-Iran ceasefire that drove oil prices lower has exchanged hostilities for three consecutive days, and Goldman Sachs warns that a serious re-escalation would

New Federal Reserve Chair Kevin Warsh told Congress Tuesday that inflation — which has run above the Fed's 2% target since 2021 — amounts to 'a tax on the American people' and pledged a 'regime change' in how the central bank operates (CNBC). Warsh formally buried flexible average inflation targeting (FAIT), a 2020-era policy that let inflation run hot to compensate for periods of weakness, calling it 'a mistake' that delivered far more inflation than intended. He's launched five internal task forces covering communications, the balance sheet, economic data, technology, and inflation measurement — the kind of institutional housecleaning that signals a genuine shift in central bank culture, not just rhetoric. Warsh did tip one optimistic card: he expects the AI investment boom, which he called 'the most striking feature' of the current economy, to eventually prove disinflationary — though some fellow policymakers remain skeptical.