The annual inflation rate in the US fell to 3.5% in June 2026, the first decline in four months, compared to 4.2% in May and below forecasts of 3.8%. The energy index increased 15.7% and food prices rose 3%. Compared to the previous month, the CPI decreased 0.4%, more than forecasts of a 0.1% decrease, and the largest fall since April 2020. Energy costs declined 5.7% following the ceasefire between the US and Iran, after rising 3.9% in May, 3.8% in April, and 10.9% in March. It more than offset increases in other indexes including those for shelter and food. Meanwhile, annual core inflation slowed to 2.6% from 2.9%, below forecasts of 2.8%. Compared to the previous month, core CPI went down 0.1%.