U.S. Inflation Dropped to 3.5% in June on Energy Retreat

The Bureau of Labor Statistics reported June 2026 inflation at 3.5% annually on July 14, down from 4.2% in May—a 0.7 percentage point swing driven chiefly by falling energy prices. The monthly Consumer Price Index fell 0.4%, reversing May's 0.5% gain. Such large single-month deceleration is rare; markets repriced Federal Reserve rate-hike odds sharply lower. Whether the energy-driven disinflation persists or bounces back hinges on July and August data yet to come.