The latest Consumer Price Index (CPI) report revealed that US inflation has fallen to 3.5%, lower than most expectations. The consumer price index in June fell 0.4% on the month, bringing the annual inflation rate to 3.5%. Economists polled by Dow Jones had called for a 0.2% decline last month and expected the inflation rate to come in at 3.8%.

New Fed Chairman Kevin Warsh on Tuesday, in remarks he delivers to Congress this week, vowed to defeat inflation and “get monetary policy right.” Calling inflation an “unfair burden,” Federal Reserve Chairman Kevin Warsh on Tuesday reiterated his call for “regime change” at the central bank. “It has been a tax on the American people and businesses. We plan on getting rid of that tax,” he said. “That means we need a regime change in policy, and we need new consideration of practices, some of which have been working, some of which haven’t.”

In addition, with easing inflation, expectations that the Federal Reserve would hike interest rates this year were reduced following the release. Odds that the central bank would hike rates at its July meeting dropped to 17% from 42% the day prior, per the CME’s FedWatch Tool. However, traders are still expecting a hike at the meeting in September.

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“The Fed’s number one objective is to get monetary policy right — or as near to it as we possibly can,” Fed Chair Warsh also said in his statement. “The members of our Committee have no tolerance for persistently elevated inflation. And we share a resolute commitment to restoring price stability.” Stocks were up modestly on Tuesday after the softer-than-expected U.S. inflation data. As of 11 am New York time, the Dow Jones Industrial Average (DJI) was down 27.79 points, or 0.05%, at 52,474.12, the S&P 500 was up 23.89 points, or 0.31%, at 7,538.92, and the Nasdaq Composite rose 194.64 points, or 0.75%, to 26,067.81.