Will lower inflation stick?

The key question is whether lower inflation will stick. It probably will. 

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A pregnant pause
Welcome to the Know the Difference Minute for Wednesday, July 12th.
The consumer price index rose 0.2% in June. That was lower than many feared. Inflation was 3.0% over the last year. That’s a huge improvement from June of 2022 when it was 9.0%. There’s still a long road ahead to get to 2% inflation, though.
The key question is whether lower inflation will stick. It probably will. Lower inflation does not require lower prices. It just requires prices to stop rising so quickly, and that’s what’s been happening.
The mild jobs report we got for June coupled with the downside surprise for inflation would typically keep the Fed on hold. They may have talked themselves into a corner though, insisting they need to hike a couple more times. Their hawkish hold at their June meeting should turn into a pregnant pause, but at least the end is near for rate hikes.
I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.