In June, U.S. inflation dropped to 3% from its 9.1% peak in 2022. This relief came from lower gasoline prices and slowing price pressures across the economy, especially for household necessities. However, inflation remains above the 2% target. Economists predict a gradual decline in inflation as input costs ease and consumer demand softens. This trend signals a potential interest rate cut by the Federal Reserve in September. While grocery prices have remained stable, services inflation, notably for car insurance and medical care, continues to rise. Core inflation, excluding food and energy, is at its lowest level in three years. Despite these improvements, housing costs remain a significant factor driving inflation. Overall, the economy shows signs of recovery, but it will take time for inflation to consistently align with target levels.