Inflation took a vacation in June, but don't pack your bags yet
The Federal Reserve finally saw a dip in its favorite inflation tracker, but the celebration lasted about as long as a summer breeze.
For the first time in six years, the Federal Reserve's pet inflation metric actually blinked and dropped by 0.1%. It turns out that when people think peace might break out between the United States and Iran, energy prices stop acting like they are trying to reach orbit.
Gas prices took a 9.2% nosedive in June, which was the only reason the numbers looked decent. Naturally, as soon as that diplomatic momentum evaporated, pump prices crawled right back above four bucks. The economy is basically a haunted house where the lights flicker every time someone mentions a ceasefire.
While we were briefly enjoying cheaper gas, personal savings rates continued their downward spiral toward zero. People are burning through their rainy-day funds faster than the gas stations are changing their signs. It is a bold strategy to celebrate a monthly data point while the long-term bank balance heads for the basement.
Source: Federal Reserve
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