June delivered the kind of inflation report the Fed dreams about — and it arrived already expired. Consumer prices fell 0.4% from May, the sharpest drop since 2020, as gas prices tumbled amid a brief ceasefire in Iran that unraveled this week. Annual headline inflation beat forecasts, cooling to 3.5%, but the relief may not last into July.
Silicon’s holdout: Not every price cooled off. Computer software costs jumped 17.4% year-over-year, a record clip fueled by the AI and data-center boom, exactly the kind of category Warsh says the Fed is now watching for spillover into inflation and jobs. Apple is already tacking on price hikes for chip-dependent laptops, even as computer prices broadly slid 0.8% for the year. Otherwise, today’s producer price report is the next test, set to shape the Fed’s preferred PCE gauge later this month.
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