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4w ago

U.S. Consumer Prices Rebound in May as Trump’s Tariffs Take Hold

Economists anticipate May’s CPI to show a rise in prices that will reinforce the Fed’s decision to keep its benchmark rate on hold next week.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.
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Economists had expected inflation pressures to grow in May. One big likely reason: Consumers were starting to see more of the fallout from higher tariff rates.
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Overview

  • New York Fed survey showed one-year inflation expectations fell to 3.2% in May after Trump eased severe tariff threats.
  • Economists forecast May’s CPI rose about 2.5% year-over-year with core CPI climbing 0.3% month-to-month, its largest gain since January.
  • The Federal Reserve, which measures its 2% target using the PCE price index rather than CPI, is poised to leave its 4.25%–4.50% policy rate unchanged at the June 17–18 meeting.
  • Retailers such as Walmart have signaled upcoming price hikes as higher import duties begin filtering through supplier inventories.
  • The Bureau of Labor Statistics has reduced its CPI data collection following staffing cuts, prompting concerns about higher volatility in future inflation reports.