BlockBeats News, July 14th, Investinglive analyst Eamonn Sheridan stated that the U.S. is expected to see a 0.2% month-over-month decline in the Consumer Price Index for June. This would be the first drop since the pandemic began, driven entirely by a 15% decrease in gasoline prices from mid-May to the end of June; the annualized inflation rate is expected to ease from May's 4.2% to 3.8%. The Core CPI is expected to rise by 0.2% month-over-month, with the annual Core Inflation Rate only slightly decreasing from May's 2.9% to 2.8%.

This means that even though the nominal overall inflation data has improved, the Federal Reserve has little justification to loosen its policy. This situation has posed a dilemma for Powell, who will make his first appearance before Congress this week: he must demonstrate a determination to curb inflation without appearing too hawkish to the point of overly tightening credit conditions. Meanwhile, the fragile ceasefire situation in the Middle East has brought two-way risks to the energy price outlook. This delicate balance will largely depend on how the Middle East situation and its impact on oil prices will evolve. (FXStreet)