From Investor’s Business Daily: 2025-06-11 09:04:00

Consumer price index data in May was milder than expected, with core goods prices remaining flat despite Trump tariffs. S&P 500 futures rose after the report, with Tesla leading early gains. A U.S.-China agreement includes a 55% tariff, but it apparently includes 25% from Trump’s first term.

Today’s CPI data won’t impact the Fed’s upcoming meeting or rate cuts. CPI and producer price index reports may influence updated Fed projections for inflation and interest rates released next Wednesday.

Markets show no chance of a rate cut at the June 18 Fed meeting, but odds for a rate cut on July 30 rose slightly after the CPI report. Odds of a rate cut in September increased, as did expectations for 50 basis points in cuts for the year.

Airfares and hotel rates decreased for the third consecutive month, contributing to moderating inflation. Hotel room rates fell by 0.1% in May while airline fares dropped by 2.7%. Over the past year, hotel rates have decreased by 1.7% and airfares by 7.3%.

Following a tame CPI report, S&P 500 futures rose by 0.3%. The 10-year Treasury yield declined to 4.44% after the report was released. The surprising aspect of the report was the absence of goods inflation in May, with new vehicle prices and apparel prices remaining flat or falling.

The overall CPI rose by 0.1% in May and 2.4% from a year ago, lower than expected. Core CPI also rose by 0.1% in May, with a 2.8% 12-month inflation rate. Wall Street economists expect a 0.2% rise in overall CPI and a 0.3% rise in core CPI for May.

Markets are not expecting a rate cut at the June 18 Fed meeting, with odds for a rate cut at the July 30 meeting standing at 16.5%. Odds for a rate cut in September have increased to 70%, with expectations for 50 basis points in cuts for the year.



Read more at Investor’s Business Daily: CPI Inflation Is Very Tame Despite Trump Tariffs; S&P 500 Pauses