US Inflation Growth Limited by Mideast Uncertainties

The recent US inflation data showed a moderate increase of 0.1% month-on-month and 3.4% year-on-year, within estimates. The energy price decline pace slowed compared to the previous month, but the downward trend continued.

The annual inflation fell to its lowest in the past four months at 2.8%, while core inflation hit its lowest since February at 2.5% year-on-year.

Analysts say the slowing inflation trend pushed back expectations for Fed rate hikes, with the likelihood of a hike in September falling below 50% and weakening further for a rate hike by year-end.