US Petroleum Prices

The latest inflation numbers could prompt the Federal Reserve to start cutting on record-high interest rates. The agency has raised interest rates 11 times in the last two years, leaving its benchmark number over 5 percent for more than a year.Thursday’s Consumer Price Index report showed inflation grew 3% over the past year, dropping 0.1% compared to a month before.Economists say falling gas prices contributed the most to the drop while rent remains the largest contributor to inflation. June was also the second-month prices either stayed stagnant or fell but remained higher than the Fed’s 2% inflation goal.The numbers are bolstering confidence for Federal Reserve Chair Jerome Powell, who testified before lawmakers this week on concerns over a cooling job market. He added high interest rates were also encouraging a slower rate of inflation.”The economy has made considerable progress toward the Fed’s 2% inflation goal, and labor market conditions have cooled while remaining strong,” Powell said. “Reflecting these developments, the risks to achieving our employment and inflation goals are coming into better balance.”But Powell also cautioned against cutting rates too early or too late. The timing, he said, could potentially push the economy into a recession.