June CPI Shows Inflation Cooling to 3.5% as Energy Prices Retreat

Headline CPI rose 3.5% year-over-year in June 2026, down from 4.2% in May and the first pullback since January 2026, beating forecasts of 3.8%. Core CPI (ex food/energy) rose 2.6% YoY. The deceleration was driven by a 5.7% month-over-month drop in the energy index as the Iran-conflict-driven oil price spike unwound, though energy remained up 15.7% year-over-year.