In June 2025, the Consumer Price Index (CPI-U) rose 0.3% monthly and 2.7% annually, indicating a persistent but easing inflation trend. The shelter index was crucial for monthly increases, contributing 0.2%, while energy prices climbed 0.9%. Food prices grew 3% year-over-year, driven mainly by grocery and restaurant costs. In contrast, categories like used cars and airline fares saw declines. Federal Reserve Chair Powell noted inflation remains above the 2% target, leading to a hold on interest rates amid signs of a stable job market and economic growth around 1.5-2%. Current monetary policy is deemed “modestly restrictive,” with rates maintained to prevent inflation from becoming persistent amid ongoing uncertainties, especially regarding tariff impacts on consumer prices. Fed forecasts suggest cautious optimism as long-term inflation expectations align with targets.