US consumer inflation cools to 3.5% in June as fuel prices ease; core gauge stays flat
US CPI inflation fell to 3.5% in June, driven by lower gasoline prices, easing consumer pressure. Core inflation remained steady at 2.6%. However, rising global oil prices and renewed US-Iran hostilities may threaten this decline.
US Consumer Price Index (CPI) inflation eased to 3.5% in June from 4.2% a month earlier, helped by a steep fall in gasoline prices. The decline provides some relief to consumers who were bearing the brunt of elevated fuel costs amid Iran-US conflict in the Middle East.
The core inflation, which excludes the highly volatile energy and food prices, remained flat in June, taking some pressure off the Federal Reserve to raise interest rates further. The annual core inflation rate stood at 2.6%.
"The index for energy fell 5.7 per cent in June after rising 3.9 per cent in May, 3.8 per cent in April, and 10.9 per cent in March. The energy index was the largest contributor to the monthly all-items decrease, more than offsetting increases in other indexes, including those for shelter and food," according to a Bureau of Labor Statistics report published on Tuesday.
In recent weeks, oil prices had declined as concerns over supply disruptions in the Gulf subsided following an interim US-Iran agreement that improved the outlook for crude shipments. The United Arab Emirates (UAE), in particular, successfully boosted exports by deploying shuttle tankers that operated with their tracking transponders switched off.
Oil prices rebound, raising inflation concerns again
The easing in headline inflation may prove short-lived as global crude oil prices have started climbing again after falling to pre-conflict levels last month,.
The latest rally has been driven by renewed hostilities between the US and Iran, with both sides launching fresh strikes on each other that have heightened concerns over disruptions to oil supplies.
The global crude oil prices climbed to their highest in a month, with Brent crude oil prices at $86 and the US West Texas Intermediate at $80, news agency ANI said in a report on Tuesday.
To make things worse, US President Donald Trump said on Monday that Washington would reinstate a naval blockade on Iran, intensifying its battle with Tehran over control of the Strait of Hormuz, a critical maritime chokepoint through which nearly 20% of the world’s oil supplies were transported before the US and Israel attacked Iran on February 28, 2026.
The American leader also said the US would protect traffic in the Strait but demanded reimbursement equivalent to 20% of all cargo shipped.
Trump under pressure as fuel prices rise
Elevated energy prices have been the main driver of headline inflation this year after the start of the US-Iran conflict at the end of February.
Higher inflation is also emerging as a political challenge for Trump ahead of the November mid-term elections. Seeking to rein in fuel costs, Trump had warned the US oil companies to bring down the pump prices of gasoline and had ordered the Justice Department to launch a probe, the news agency reported.
About the Author
Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.
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