Inflation Sticks Around: Energy Drops Won’t Cure Core Price Pressures

Even if June consumer prices dip thanks to cheaper gas, the broader inflation picture remains stubborn. Core inflation, driven by services and wages, has stayed elevated, and tariffs plus AI-related spending—data-center power, memory chips, and software—are pushing costs higher. Housing inflation has cooled only slowly, while war-related demand and disrupted supply chains could sustain price pressures for years, making a quick return to normal inflation unlikely and leaving the Fed far from its 2% target for the foreseeable future.