US Inflation Slows but Middle East Conflict Fuels Oil Price Surge

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

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

However, with Brent oil prices hovering just above $90 a barrel and average US gasoline prices rising back above $4 a gallon, economists expect the Fed to raise borrowing costs as soon as September.

Fed Chairman Kevin Warsh emphasized that there is no soft inflation target, reiterating the central bank's commitment to lowering inflation back to 2%.