A further decline in US inflation is expected this week, which could bolster the case for multiple Federal Reserve interest rate cuts this year.
Economists are forecasting annual consumer price inflation of 3.1 per cent in June, when the latest figures are published by the Bureau of Labor Statistics on Thursday, according to economists polled by Reuters, down from 3.3 per cent in May.
Alongside Friday’s data showing that the pace of hiring in the US is slowing, the figures could encourage the Fed to deliver its first reduction in borrowing costs sooner rather than later. Markets at present expect two rate cuts this year, with the first arriving in September or November, but Fed officials suggested when they met in June that they expected to cut interest rates only once this year.