The Consumer Price Index in May rose 2.4% on an annual basis, as economists watch for signs that
President Trump’s tariffs, which are taxes that U.S. companies pay on imported goods, are beginning to trickle through to prices on everyday items bought by Americans.
By the numbers
The CPI was forecast to rise 2.5% last month on an annual basis, an increase from April’s 2.3% rate, according to economists surveyed by financial data firm FactSet.
The CPI, a basket of goods and services typically bought by consumers, tracks the change in those prices over time.
What the experts say
While inflation remains far lower than during its post-pandemic spike – when it reached a peak of 9.1% in June 2022 — it’s still higher than the Federal Reserve’s goal of driving it down to a 2% annual rate.
Because of that, Wall Street expects the Fed to hold off on cutting rates until later this year, with economists polled by FactSet giving a 100% probability that the central bank will keep rates steady at its June 18 meeting.
Economists are also keeping a watchful eye on when Mr. Trump’s tariffs, which he has imposed on almost every nation on the globe, will show up in the inflation data. Tariffs are paid by U.S. companies when they import foreign goods, and Walmart and other importers have said they expect to hike prices for consumers to pass along those costs.
“Going forward, the impact of tariffs will likely provide a somewhat larger boost to monthly inflation, and we expect monthly core CPI inflation of around 0.35% over the next few months,” Goldman Sachs economists said in a June 9 research report. “Our forecast reflects a sharp acceleration in most core goods categories but limited impact on core services inflation, at least in the near term.”
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