Overview

• The Consumer Price Index rose 0.1% from April to May, below economists’ forecasts of 0.2%, while annual inflation reached 2.4%.
• Many companies have absorbed the higher duties rather than pass them on to consumers, muting the immediate impact of tariffs on prices.
• Federal Reserve officials are expected to keep the benchmark interest rate unchanged until clearer tariff-driven price pressures emerge.
• President Trump has publicly called for a full-point cut in interest rates, a stance echoed by Vice President JD Vance as he dubbed the Fed’s restraint ‘monetary malpractice.’
• Consumer expectations for inflation dipped in May for the first time in 2025, though economists caution that lagged tariff effects could push prices higher later this year.