US May Consumer Prices Rise Modestly Amid Tariff Impact

U.S. consumer prices are expected to have risen modestly in May, with the Consumer Price Index (CPI) forecasted to increase 2.5% year-over-year, up from 2.3% in April. Core CPI, which excludes food and energy, is projected to rise 2.9% annually, reflecting the earliest effects of President Donald Trump's import tariffs beginning to push prices higher, particularly on goods like clothing, furniture, and appliances. Despite these tariff-related inflation pressures, lower gasoline prices and possibly cheaper airfares and used cars may have tempered the overall rise in consumer prices. Monthly increases are expected to be 0.2% for headline CPI and 0.3% for core CPI, which remains above the Federal Reserve's 2% inflation target and could influence the Fed's policy outlook. While some analysts note retailers had delayed price increases until May and June, the data may signal the start of more sustained inflationary pressures through the rest of the year. Overall, the May CPI report will be closely watched for indications of how tariffs are impacting inflation and the potential implications for U.S. monetary policy and the dollar's value.