Inflation cooled in June to slowest pace in more than 2 years

Inflation dipped in June to its slowest pace in more than 2 years, indicating price increases are cooling amid the Federal Reserve’s rate-hiking regime. 

The Consumer Price Index grew at an annual rate of 3%, the Labor Department said on Wednesday. Economists had expected a 3.1% increase, according to FactSet. 

The increase was the smallest since March 2021, the Labor Department noted.

Inflation has cooled since hitting its highest levels in four decades last year, partly in the face of higher interest rates engineered by the Federal Reserve, which have made it more expensive for consumers and businesses to borrow money. Yet prices are still rising at a pace that’s higher than the Fed’s target of 2%, and the central bank has indicated that additional interest rate increases could be in store.

—This is a developing story and will be updated.