US Inflation Rises Slightly to 2.4% in May, Still Below Forecasts

Inflation in the US ticked higher to 2.4% in May, slightly up from 2.3% in April, marking the first increase in four months.

While this signals a mild rebound in price growth, it came in just under market expectations of 2.5%, suggesting inflation is still largely under control. The modest rise may calm fears of a renewed inflation surge, but it’s likely to keep the Federal Reserve on alert as it weighs its next policy move.

Key Drivers Behind the Rise

Food prices rose 2.9% year-over-year, up from 2.8% in April.
Transportation services inflation accelerated to 2.8% from 2.5%.
Used vehicle prices rose 1.8% (vs 1.5%), and new vehicles edged up 0.4% (vs 0.3%).
Shelter inflation eased slightly to 3.9%, down from 4%.

Energy prices continued to drag on the headline figure:

Gasoline prices dropped 12%
Fuel oil fell 8.6%
Natural gas remained elevated at 15.3%

Monthly Inflation Stays Soft

Headline CPI rose just 0.1% month-over-month, down from 0.2% in April and below forecasts.
Core inflation (excluding food and energy) held steady at 2.8% year-over-year, matching April’s level and marking a multi-year low.
Monthly core CPI rose 0.1%, slowing from 0.2% and missing the 0.3% forecast.

Policy Implications

May’s inflation report supports the view that, despite some category-specific price increases, overall inflation remains under control. With both headline and core figures coming in below forecasts, the data could give the Federal Reserve more flexibility to hold off on further rate hikes or even consider easing if economic conditions warrant it in the coming months.

Latest Analysis

Germany’s Inflation at 2.1% in May, Energy Prices Fall

Germany's inflation steadied while the rest of Eurozone showed signs of instability,

Detail

US and Japan 10-Year Yields Hit 5-Week Lows (13.06.2025)

The yield on the US 10-year Treasury note dropped to around 4.34% on Friday, marking its lowest level in five weeks, as investors sought safe-haven assets following Israel’s preemptive strike on Iran’s nuclear facilities.

Detail

CPI Miss Strengthens Case for Fed Easing (12.06.2025)

US and Japanese bond yields fell after softer-than-expected CPI data increased bets on Federal Reserve rate cuts, possibly starting by September. US May CPI came in below forecasts across key indicators, with core inflation reaching its lowest annual rate since 2021.

Detail