HomeFinancial MarketsConsumer Prices Rise at Slowest Rate Since April 2021

Consumer Prices Rise at Slowest Rate Since April 2021

U.S. consumer prices rose at their slowest pace since April 2021, data released on Tuesday morning by the Bureau of Labor Statistics showed. This indicates a continued cooldown in U.S. inflation.

According to the Consumer Price Index (CPI), headline inflation in May edged just 0.1% higher compared to last month while rising 4% on an annual basis. This is a slowdown from April’s 0.4% month-over-month rise and 4.9% annual gain. May’s figures fall largely in line with Bloomberg’s forecasts of a 0.1% month-over-month growth and a 4.1% annual rise.

Despite its notable slowdown, inflation remains significantly higher than the Federal Reserve’s 2% target. While the Fed has been implementing a strict interest rate hiking agenda, the central bank runs the risk of sending the U.S. into a recession if rates are raised too high.

Currently, the Fed is considering an interest rate pause in either June or July before reassessing the nation’s inflation data ahead of its future policy meetings. The Fed’s June interest rate decision is set to be announced late on Wednesday.

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