Fed’s preferred inflation gauge cools, adding to likelihood of a September rate cut

AP Economics Writer

WASHINGTON (AP) — The Federal Reserve’s favored inflation measure remained low last month, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates in September. Prices rose just 0.1% from May to June, up from the previous month’s unchanged reading. Compared with a year earlier, inflation declined to 2.5% from 2.6%. Excluding volatile food and energy prices, so-called core inflation rose 0.2% from May to June, up from the previous month’s 0.1%. Measured from one year earlier, core prices increased 2.6%, unchanged from June. Taken as a whole, Friday’s figures suggest that the worst streak of inflation in four decades, which peaked two years ago, is nearing an end.