The decline in prices at the pump helped moderate inflation last month in the United States, this lull being tarnished by the resumption of hostilities in the Middle East in recent days, which caused oil prices to rise again.
The consumer price index (CPI) slowed to 3.5% year-on-year in June, compared to 4.2% in May, according to official data released on Tuesday.
Core inflation, that is to say excluding volatile food and energy prices, also slowed to 2.6% year-on-year, compared to 2.9% the previous month.
This data is significantly better than what investors expected.
However, the pace remains well above the objective of the American Federal Reserve (Fed). Above all, this decline is largely due to the decline in the price of gasoline (-9.7% over one month) which followed the diplomatic détente between Washington and Tehran.
Hostilities have since resumed in the Gulf. World oil prices have rebounded, auguring repercussions even at American gas stations.
“There are fears that this respite will only be short-lived with the resumption of the war in Iran. The situation is too uncertain to know how this inflation story will end,” commented Heather Long, economist for Navy Federal Credit Union.
For President Donald Trump’s economic advisor, Kevin Hassett, this is “the best inflation report in the last six years.”
He considered in an interview with Fox News that the rise in oil prices was only a “small hiccup because of the Iranians” which should cause only limited disruption.
“Too high”
The war, unpopular in the United States, put pressure on the American executive a few months before national elections.
Donald Trump made improving purchasing power one of his priorities during his victorious 2024 campaign.
According to another official report, American wages increased by 3.5% year-on-year in June. Tuesday’s data showed prices rose at the same rate over the period.
“Inflation remains too high, with families paying the price for Donald Trump’s failed economic policy. (…) Instead of lowering costs, Donald Trump is doubling down on his illegal war against Iran,” criticized Democratic Senator Elizabeth Warren in a statement.
The financial markets have heaved a sigh of relief as the prospect of a very imminent increase in interest rates from the Fed is receding.
The day before, one of the American central bankers, Governor Christopher Waller, had indicated that he would support tightening “in the short term” if underlying inflation continued to go in the wrong direction. So this is not the case.
He stressed that energy was only one of the sources of inflationary pressure on the world’s largest economy, alongside the customs duties put in place by Donald Trump but also the frenzy around artificial intelligence (AI) and data centers which is increasing the costs of air conditioning equipment and electronic components.
During his first congressional hearing since taking office, new Fed chief Kevin Warsh stressed that the institution would not tolerate persistently high inflation.
On a daily basis, Americans spend more on housing (+2.8% over one year for rent), clothing (+3.9%), and food (+3%). Fruits and vegetables, in particular, are 5.3% more expensive than in June 2025.
But it is the war in the Middle East and its ramifications that continue to weigh the most: energy as a whole has increased by almost 16% year-on-year, plane tickets are up more than 26%.
