Underlying Inflation Hits Lowest Level in Years. The Key Price Measures Show Progress Toward the Fed's 2% Target.

The Dallas Federal Reserve's trimmed mean measure showed one-month annualized inflation slowing to 1.4% in June, down sharply from 2.7% in May and marking its lowest reading since November 2020. Economists say the data reinforce the view that underlying inflation is cooling, even though headline measures remain above the Fed's 2% objective. The latest figures were released alongside the Commerce Department's June Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge. Trimmed mean inflation measures are designed to filter out temporary price swings that can distort the broader picture. The Dallas Fed's methodology excludes roughly 24% of the lowest price changes and 31% of the highest, while the Cleveland Federal Reserve publishes a separate 16% trimmed mean Consumer Price Index.