Trimmed Mean Measures Show Inflation at Lowest Level Since 2020

The Federal Reserve's inflation measures have reached their lowest levels in years, according to recent data. The trimmed mean measures, which exclude price increases and decreases at the high and low ends of the spectrum, show a significant decrease in inflation rates.

June's one-month annualized rate was 1.4%, down from 2.7% in May, and is the lowest level since November 2020. The 12-month rate also dipped to 2.2%, down from 2.4% a month ago and its lowest level since July 2021.

Citigroup economist Andrew Hollenhorst noted that these trimmed mean measures should 'fall closer to target-consistent rates' as underlying inflation slows towards the central bank's target of 2%. Markets are expected to price out rate hikes in coming months on this data, but some experts caution against reading too much into it.