Overview

• The Consumer Price Index increased 2.4% year-over-year in May, up from April’s 2.3% but below the 2.5% pace economists had forecast.
• Core inflation, excluding food and energy, held at 2.8% annually after a 0.1% monthly rise, marking its smallest yearly gain in four years.
• May data likely understate the influence of President Trump’s April tariffs, which economists say have yet to fully pass through to consumer prices.
• A tentative U.S.-China framework to ease trade tensions has been agreed, but the average effective tariff rate on imports has climbed from about 2% last year to roughly 14%.
• The Federal Reserve is widely expected to keep its benchmark interest rate unchanged at its June meeting as policymakers assess ongoing inflation uncertainty.