U.S. Inflation Accelerates to 2.7% in June, Core CPI Hits 2.9% Ahead of Fed Decision

The Bureau of Labor Statistics said Thursday that the Consumer Price Index climbed 0.3 % in June and 2.7 % from a year earlier, up from May’s 2.4 % pace and the highest reading since February. Core CPI, which strips out food and energy, advanced 0.2 % on the month and 2.9 % annually, driven by firm shelter, auto-insurance and medical-care costs even as energy prices fell.

Markets initially wobbled on the headline surprise: futures on the S&P 500 pared gains, two-year Treasury yields ticked above 4.50 % and the dollar strengthened against the yen as traders trimmed odds of a September rate cut to just under 50 %. Economists noted early signs of tariff pass-through in certain imported-goods categories, while Fed watchers said the report gives policymakers scant room to ease at the July 31 meeting without clearer disinflation in services.‍

Still, some analysts pointed to softer month-over-month core momentum and moderating wage growth as evidence underlying inflation is gradually cooling; others warned sticky shelter costs could keep core running near 3 % into autumn. With July and August CPI prints now pivotal, investors and the Fed will scrutinize whether tariff-related bumps fade or broaden—determining if the central bank can finally pivot from its 5.25 % policy peak before year-end.