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Earlier this week Federal Reserve Chair Janet Yellen signaled in her congressional testimonies that the Federal Open Market Committee’s rate hikes may already be closer to an end. Yellen also outlined that the Fed’s $4.5 trillion balance sheet will be unwound slowly and steadily, and it will be closely monitored to ensure that it is not disruptive to fixed income markets.

Now we have seen some fresh economic readings that show why the Federal Reserve may be less robust in its tightening.

The U.S. Department of Labor released its consumer price index (CPI) for June and the trend of less than 2% inflation continues. The headline CPI for June was 0.0% on the monthly reading, versus a 0.1% expectation set by Bloomberg. The annualized headline CPI was up 1.6% from a year ago.

Then there is the core CPI reading, which generally excludes food and energy. This monthly reading was up only 0.1%, also shy of the 0.2% Bloomberg estimate. And the year-over-year core CPI gain was just 1.7%.

As a reminder, the FOMC has a target of 2.0% to 2.5% for annualized inflation. June marked the third consecutive 0.1% gain on the core rate. Food prices were flat and energy costs were down by 1.6%.

Then came a weak reading on retail sales in June. This has been a source of pressure for a while, but the negativity here just doesn’t feel like it is showing economic strength. Bloomberg was calling for small gains in every major segment, but they were all showing slight declines. Retail sales were down 0.2% as a whole, and they were down 0.2% if you back out auto sales. If you back out the autos and gas, then the drop was just 0.1% in June.

Many aspects of retail remain weak. Food and beverage stores were down 0.4%, department stores were down 0.7% and restaurant sales were down 0.6%. Retail sales of gasoline were down 1.3%, based largely on lower prices. Then there are the non-store retailers, which includes e-commerce, with a gain of just 0.4%.

Earnings season is set to ramp up next week, and the numbers so far are still signaling growth, but less than average growth. The hope of getting back to 3.0% growth in GDP may remain more hope than reality for a while longer.