Inflation Slows to 2-year Low
Consumer prices in the United States cooled last month, rising just 0.1 percent from April to May and extending the past year's steady easing of inflation. At the same time, some measures of underlying price pressures remained high.
Measured year over year, inflation slowed to just 4 percent in May — the lowest 12-month figure in over two years and well below April's 4.9 percent annual rise. The pullback was driven by tumbling gas prices, a much smaller rise in grocery prices than in previous months and less-expensive furniture, air fares and appliances.
Tuesday's inflation figures arrive just as Federal Reserve officials begin a pivotal two-day meeting, after which they're expected to leave interest rates alone following 10 straight rate hikes dating back to March 2022. On Wednesday, the central bank will likely announce that it's skipping a rate hike but might hint that it will resume raising rates again as soon as July. Top Fed officials have said they're leaning toward a so-called "skip" to allow time to assess how their rate hikes have affected inflation and the overall economy.
Still, last month's drop-off in overall inflation isn't likely to convince the Fed's policymakers that they're close to curbing the high inflation that has gripped the nation for two years. The Fed tends to focus more on "core" prices, which exclude volatile food and energy costs, and generally provide a clearer view of inflation.