Inflation Eases, But Oil Price Spike Threatens Reversal

US inflation slowed in June to 3.7% year-over-year, down from May's 4.1%, according to the Commerce Department's Bureau of Economic Analysis.

The moderation in PCE inflation reflected a retreat in oil prices amid a fragile US-Iran ceasefire, which has since fallen apart.

Brent oil prices are now hovering just above $90 a barrel, while average US gasoline prices have risen back above $4 a gallon.

Excluding food and energy components, the PCE Price Index rose 3.3% year-over-year in June after increasing 3.4% in May.

The Federal Reserve tracks the PCE inflation measures for its 2% target, which Fed Chairman Kevin Warsh emphasized 'there is no soft inflation target' on the committee's watch.