U.S. Inflation Remains Muted in May, Tariffs Show Limited Impact
In May 2025, U.S. inflation rose a modest 2.4% year-on-year, with 0.1% monthly CPI growth, aligning with forecasts and remaining well-contained—even amid ongoing tariff pressures. 1. Key CPI Metrics Headline CPI: Increased 0.1% MoM, 2.4% YoY, just below expectations of 2.5% . Core CPI (excluding food & energy): Up 0.1% monthly and 2.8% annually, tracking mostly with April . 2. Tariff Effects Remain Elusive Contrary to fears, tariff-driven inflation was minimal in May: Apparel and vehicles saw price declines. Some categories, like appliances and audio gear, had minor upticks—but overall prices stayed muted . 3. Behind the Containment Analysts cite several reasons for the limited tariff impact: Retailers sold pre-tariff inventory. Weak consumer demand discouraged passing on costs. Massive freight movements slowed price transmission . 4. Fed's Cautious Stance Federal Reserve officials, including Governors Waller and Musalem, confirmed they’re watching […]