Breaking: US CPI Inflation Slows Slightly to 2.4% in May, Below Expectations

Breaking: US CPI Inflation Slows to 2.4% in May, Below Forecast

Headline Data: Inflation Undershoots Expectations in May

Inflation in the United States rose at a slower pace than expected in May, according to the latest data released by the US Bureau of Labor Statistics (BLS) on Wednesday. The Consumer Price Index (CPI) increased by 2.4% year-over-year, slightly under the 2.5% forecast and up modestly from 2.3% in April.

Core Inflation Holds Steady

The core CPI, which excludes volatile food and energy prices, remained unchanged at 2.8% YoY, matching the April figure. On a monthly basis, both headline CPI and core CPI rose by 0.1%, missing consensus estimates of 0.2% and 0.3%, respectively.

What This Means for Markets and the Fed

With inflation coming in below expectations, traders may begin to adjust their expectations for the Federal Reserve's monetary policy path. Softer inflation figures could support the case for a more dovish stance from the Fed later in 2025.

Market Participants React Cautiously

Initial market reactions remain subdued, as investors await further cues from the Fed and the upcoming 10-year US Treasury note auction. Volatility may increase during the North American session, especially if Fed officials issue updated guidance.

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