Federal Reserve's Inflation Index Hits 2-Year Low, Signaling Economic Slowdown

The Federal Reserve's inflation index fell to its lowest level since April 2021, primarily due to lower gas prices and slower-rising food costs. Consumer spending increased by just 0.1 percent in May, indicating a slowdown influenced by high prices and interest rates. While overall inflation eased, core prices, excluding food and energy costs, remained elevated, prompting the Fed to consider further interest rate hikes. The report also showed that Americans' incomes rose, outpacing inflation. The Fed's policymakers envision two additional rate hikes this year. Inflation has also eased in the eurozone, but core inflation remains stubborn.