Inflation slows to 3.5% in June due to lower gas prices

Inflation slowed more than expected in June, when gas prices temporarily fell due to a possible agreement to end the war in the Middle East, according to government figures released Tuesday.

The Consumer Price Index (CPI) was 3.5% year-over-year, compared with 4.2% in May, according to the Department of Labor.

These figures are clearly better than investors had expected. This decline is largely due to the drop in gasoline prices (-9.7% over one month), which followed the diplomatic thaw between Washington and Tehran.

But since then, hostilities have resumed in the Gulf. Global oil prices have risen again, foreshadowing an upcoming increase in prices at gas stations.