US Inflation Muted Despite Recent Tariffs

Consumer Price Index data for May show inflation remains subdued, with prices rising 2.4% year-over-year and 0.1% month-over-month, despite predictions that President Trump’s tariffs would push prices higher. Key categories such as new and used cars, airline fares, and clothing saw price declines or stability, with new vehicle prices holding steady since tariffs began in March. Economists caution that the muted inflation may be temporary, as businesses could still be relying on pre-tariff inventories and tariff effects may appear in coming months. The Federal Reserve is expected to consider a rate cut as soon as July, though policymakers remain cautious due to ongoing trade uncertainties. The data provides relief to consumers and the Fed, but experts warn the full impact of tariffs is yet to be seen.