Consumer prices increased slightly in June by 0.3 percent to an annual rate of 2.8 percent, but not because of imports, the latest data from the Bureau of Labor Statistics shows, with import prices only rising 0.1 percent. In the past year, import prices are actually down 0.2 percent.
The Federal Reserve has been holding interest rates at an elevated level since 2022 to deal with the crippling inflation that followed the Covid recession and global supply crunch, wherein production did not catch up to demand fast enough following the global economic lockdowns.
The Fed raised the federal funds rate to 5.25 percent to 5.5 percent by the summer of 2023 and then performed three rate cuts last year down to 4.25 percent to 4.5 percent by December 2024.
