June U.S. CPI Falls to 3.25%, Core CPI to 2.6%, Both Below Expectations

According to China Galaxy Securities, June U.S. CPI came in at 3.25% year-on-year, with core CPI at 2.6%, both significantly below market expectations of 3.8% and 2.9% respectively. The decline was driven by weaker energy prices following the reopening of the Strait of Hormuz, softening tariff inflation, and cooling housing costs.

China Galaxy Securities said that from an inflation perspective, the Federal Reserve has no urgency to raise rates, as inflation has entered a "weakening period." The institution believes the current inflation lacks sustainability from cyclical, tariff, and expectations dimensions; service inflation, while warranting attention, shows no sign of sustained acceleration. The firm forecasts July CPI to remain around 3.5% year-on-year, with potential further cooling in August and September if oil prices do not surge sharply.