The Fed's Preferred Inflation Gauge Stayed Tame in May
Price pressures have stayed relatively muted in recent months, surprising economists and policymakers who expected U.S. inflation to have flared up by now because of President Trump's tariffs. New data on Friday confirmed that this trend continued in May, but it provided little comfort to those bracing for inflation to reaccelerate this summer.
Consumer prices, as measured by the Federal Reserve's preferred gauge, rose just 0.1 percent last month even as the Personal Consumption Expenditures price index ticked up slightly to 2.3 percent compared to the same time last year.
That was a step up from April's 2.1 percent annual pace and brought the 12-month index further from the Fed's 2 percent target.
'Core' prices, which strips out volatile food and energy costs, also rose 0.2 percent. Compared to the same time last year, that index is now up 2.7 percent.
The data, which was released by the Commerce Department, is being closely watched by the officials at the central bank, who have become increasingly divided over when and by how much to lower interest rates this year.
The fissures stem from differing opinions about how significantly Mr. Trump's tariffs will stoke inflation and the resilience of the labor market, which has shown signs of cooling.
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Yahoo
27 minutes ago
- Yahoo
Jeff Bezos and Lauren Sánchez are one of the richest married couples. Here's how the ultrawealthy do prenups.
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33 minutes ago
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