Federal Reserve Bank of San Francisco President Mary Daly said she still thinks it’s reasonable for policymakers to plan on two interest-rate cuts this year, emphasizing that the central bank should not wait too long before moving.

The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.

What is clear is that the current 4.33% median Fed funds target rate remains well above the inflation trend. Even after the acceleration in consumer prices in June, the policy rate is roughly 1.4 percentage points above headline CPI’s one-year change – close to the biggest gap post-pandemic.

With the Federal Reserve's July meeting on the horizon, many prospective homebuyers and homeowners are wondering what it could mean for mortgage rates. After years of relatively high borrowing costs, even the slightest dip could open doors for those hoping to buy or refinance. But the path forward is far from clear.

The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.

Also in today’s newsletter, US set to ban Chinese tech in submarine cables, and Nvidia chief vows to ‘accelerate recovery’ of China sales

The report on wholesale inflation came a day after the Labor Department reported that consumer prices last month rose 2.7% from June 2024, the biggest year-over-year gain since February, as Trump’s sweeping tariffs pushed up the cost of everything from groceries to appliances.

The producer price index for total final demand was unchanged in June, the Bureau of Labor Statistics reported.