Inflation cooled last month to its slowest pace in two years and reached 3%

Inflation cooled last month to touch its lowest level in two years and reached 3%, an encouraging sign that the Fed’s rate hikes are working. But it still remains above the 2% benchmark target rate.

The data released by the Labor Department yesterday revealed that core inflation rose just by 0.2% month-over-month in June. It is a broader measure and strips out volatile food and energy prices.

So, what prices are down?
Used and new cars, eggs, gas: Used car prices have been coming down as costs dropped 5.2% in June. New car prices are also seeing a decline.

Gas prices dropped to ~$3.50 a gallon on average, nationally, down from a $5 peak last year.

The prices of eggs reached a national average of $2.67 a dozen, down from a peak of $4.82 at the start of this year.

What prices did not budge?
Bread, frozen vegetables: White bread prices jumped more than 11% over the last year.

Frozen vegetable prices went up more than 17%.

What this means?
According to economists, despite the positive inflation report, the Fed may resume its rate hikes to meet the 2% target.