14 July 2026
If you are covering the latest US inflation data, please find below a comment from Lindsay James, investment strategist at Quilter:
"In what is a fairly high-stakes data point, US inflation has taken the immediate pressure off the Federal Reserve to raise rates as figures came in lower than expected. Inflation for June was 3.5%, below the expectations of 3.8% and a considerable drop on the 4.2% registered the previous month, whilst core inflation rose 2.6% in 12 months, also below market expectations of 2.8%. While Kevin Warsh has now firmly got his feet under the table, it does not mean rate cuts are looming in order to appease President Trump. Instead, we are likely to see a conservative outlook from the Federal Reserve when it meets in a fortnight.
"Recent comments from Federal Reserve member Christopher Waller underline that the central bank is keen not to be seen as repeating their post-pandemic mistake of being too late to tame inflation and that a lack of progress on core inflation could signal a rate hike coming sooner rather than later.
"Whilst a sharp drop in US gas prices in June means that the headline level of annual inflation is lower, core inflation, which strips out energy and food prices, remains well above the target rate of 2%. The labour-intensive service economy is a meaningful factor in this, with a resilient labour market one reason, not only driving wages higher but also supporting consumer spending and service-sector demand.
"Clearly these falls in inflation are to be welcomed, but they come at a time of a resurgence in oil prices, due not only to the resumptions of attacks in the Middle East but also because of the demands by Donald Trump that the US will charge a 20% fee on cargos transiting the Strait of Hormuz. Whilst this eventuality looks highly unlikely to ever materialise, not least because of the inability of the US to control these waters, the question of tolls in the region is one that isn’t going away whilst the pathway to a lasting agreement looks ever more challenging in the near term."
