We received June inflation reports this week. As the temperatures across the country soar to new heights, prices paid by both consumers and wholesalers are coming off the boil (for now).

Consumer prices (CPI) was released on Tuesday. Prices fell 0.4% month over month and annual increase in June was 3.5%, down from an annual increase of 4.2% in May and below the expected 3.8% annual increase. The majority of that decline was due to falling energy prices as the Middle East conflict began to cool last month. (However, it’s anticipated that energy prices will escalate again this month as the ceasefire talks stalled out).

Beyond energy impacts, price slowdowns were rather broad based. Prices fell in June for apparel, hotels, used cars, car insurance, and medical care. Shelter costs rose by the lowest monthly margin since 2021.

Wholesale prices (PPI) followed suit on Wednesday, showing a similar decline in prices paid by wholesalers. PPI declined by 0.3% in June, down from an adjusted 0.6% rise in May (beating expectations of a flat print). Energy prices helped reduce the price paid by producers, just as it did for consumers in the CPI read.

Fed Chairman Kevin Warsh testified in front of Congress on Tuesday, re-emphasizing his lack of tolerance for inflation and his intention to halt price increases. “The longer that prices have been above the inflation target, it’s usually a bit harder to dislodge them and get them lower. Our job, my commitment to you, is to take sticky prices and to untick them” Warsh said during his testimony.

What do these reports mean for markets in the near term? While it’s hard to know for sure, these reports seems to pour cold water on the belief that the Fed may need to raise rates anytime soon to curb inflation. Prior to these reports, markets had flipped back to pricing in rate hikes as soon as the July meeting (instead of cuts as had been the case early in 2026). It’s far too soon to declare victory and resume talk of drastic rate cuts in my view, but these reports certainly went a long way to normalize the conversation regarding the future path of rates. In all, these are good news for now – but stay tuned as the volatility in prices (namely energy) is sure to continue throughout the summer.

Onward we go,