The United States recorded its steepest monthly fall in consumer prices since April 2020, with the consumer price index dropping 0.4% in June, pulling the annual rate down to 3.5% from 4.2% in May. The decline, which exceeded market expectations of a 0.2% retreat, was driven overwhelmingly by a collapse in energy costs after President Donald Trump signed a memorandum of understanding with Iran. Viewed from Washington, the headline number provides the first month-on-month price decline in two years and temporarily relieves a White House that has seen the president’s approval rating sink to 36%, the lowest of his two terms, according to YouGov data cited by analysts in Latin America.

The mechanism behind the drop, however, masks persistent price pressures. Stripping out volatile food and energy, core inflation remains elevated, with services costs—haircuts, medical visits, car repairs—continuing to climb in a pattern economists term “persistent” inflation. Claudia Sahm, chief economist at New Century Advisors, noted that the energy-price surge from February to May is still working its way through supply chains, and businesses are only now passing those costs into other goods and services. In Argentina, where monthly inflation slowed to 1.1% in June and core inflation hit 1.6%, the second-lowest reading of the Milei era, consultancies in Buenos Aires celebrated the disinflation trend but flagged a fiscal warning: the primary deficit in June missed the IMF programme target by 0.57 trillion pesos, a small but symbolically significant miss that shifts attention to revenue and spending in the second half of the year.

Financial markets absorbed the data with a tilt toward risk assets. Bitcoin moved to around $64,600 and ethereum to $1,900, as exchanges in Jakarta reported that the softer inflation print fed expectations of a more stable monetary policy trajectory. Indonesian market participants pointed to the upcoming ETH Genesis Day on 30 July as an additional narrative supporting ethereum, though they cautioned that crypto prices remain sensitive to geopolitics and Federal Reserve signals. The new Fed chair, Kevin Warsh, inherits a central bank that has not met its 2% inflation target for five years, and the persistence of services inflation leaves open the question of how long rates must stay restrictive.

The political dimension is sharpening. Trump’s approval has fallen to 36%, with 59% disapproving, and the decline correlates with the eruption of the Iran conflict and a rise in petrol prices to $4.48 per gallon. The Economist’s net approval rating on inflation and prices stands at -43. With midterm elections approaching, Republican concerns centre on immigration and taxes, while Democrats focus on healthcare and climate; inflation and civil liberties worry both camps almost equally. The next factual milestone is the Federal Reserve’s assessment of whether the June disinflation is durable enough to alter its policy stance, a judgment that will ripple from Buenos Aires to Jakarta.