From Yahoo Finance: 2025-06-11 09:03:00

U.S. consumer prices rose slightly in May, with the consumer price index (CPI) increasing by 0.1%. Year on year, the CPI climbed 2.4%, while core CPI inflation rose 2.8%. Inflation has been slow to reflect Trump’s tariffs due to pre-levy merchandise sales. Stocks rose, Treasury yields fell, and the dollar declined in reaction.

Economists had forecast the CPI to rise 0.2%, but it only increased by 0.1%. Excluding food and energy, the core CPI rose 0.1%. Inflation data has not yet shown the impact of Trump’s tariffs. Stocks, bonds, and forex reacted positively to the lower-than-expected CPI numbers.

Market analysts noted that the CPI numbers were tamer than expected, with some imported food items seeing high inflation. Stability in trade policy is crucial to prevent inflation spikes. The Fed may shift focus to growth threats over inflation threats based on recent data. Reaction to the CPI print was generally positive in the markets.

The CPI print being lower than expected provided a relief rally in markets, with equities rising and bond yields falling. But the impact of tariffs and labor tightness remains uncertain. Energy prices have been holding steady, contributing to better-than-expected numbers. The market interpreted the data as giving the Fed room to reduce rates due to lack of inflationary pressures.



Read more at Yahoo Finance: US consumer prices rise moderately in May