US government reported that inflation cooled to its slowest pace in more than two years, with the Consumer Price Index growing at an annual rate of 3%. Core inflation, which strips out volatile food and energy prices, rose 4.8% on an annual basis. The cooling of inflation is seen as a sign that the Federal Reserve's interest rate hikes are having the desired effect, but the Fed will need to continue to monitor inflation closely to ensure it remains at a manageable level.
