Fed’s Benchmark Inflation Measure Cooled Last Month—But U.S. Economy Slowed In Second Quarter Ty Roush is a breaking news reporter based in New York City.Jul 30, 2026, 08:49am EDTToplineThe Federal Reserve’s go-to inflation metric fell from a nearly three-year high in June as economic growth was slower than expected this latest quarter, according to federal data published Thursday, as persistent concerns about rising consumer costs are expected to push the central bank toward an interest rate hike.Persistent inflation concerns are expected to push the central bank toward an interest rate hike. Getty ImagesKey FactsAnnual inflation was 3.3% in June, down from 3.4% in May in what was the highest annual rate since October 2023 (3.5%), according to core consumption expenditures index data reported Thursday by the Bureau of Economic Analysis.That matched consensus economist estimates, according to FactSet, despite settling well above the Federal Reserve’s 2% target rate.Real gross domestic product increased at an annual rate of 1.5% in the second quarter, the agency separately reported, falling well below Wall Street’s expectations of 2.1% annual growth.This is a developing story.LOADING VIDEO PLAYER...FORBES’ FEATURED Video