US Inflation Jumps to 2.7% in June Amid Tariff Pressures

US Inflation Jumps to 2.7% in June Amid Tariff Pressures

US inflation accelerated in June 2025, with the Consumer Price Index (CPI) rising 0.3% month-over-month—the highest since January—translating to a 2.7% year-over-year increase, up from 2.4% in May. The spike was mainly driven by rising energy and food prices.

Core Inflation Also Picks Up

Excluding volatile items like food and energy, core CPI rose a modest 0.2% m/m, aligning with Bloomberg estimates and pushing the annual rate up to 2.9%, from 2.8% in May.

Tariff Pressures Add to Inflation

Shelter costs continued to be the main driver of core inflation, though at a slightly slower pace. However, goods inflation excluding food and energy increased by 0.2% m/m (0.6% y/y), compared to 0.0% m/m and 0.3% y/y in May, reflecting the early effects of President Trump’s tariffs.

Interestingly, the rise in goods prices was partially offset by price drops in new and used vehicles, while services inflation edged higher again.

Analyst Outlook: More Upside Ahead

“We still view the general trend of inflation tilted to the upside due to the tariff effect,” analysts noted.
“We are maintaining our 2025 US headline CPI forecast at 3.6% and core CPI at 3.8%. We still see the tariff-driven inflation spike as a temporary shock likely to ease in 2026.”

Key Data Recap:

• Headline CPI (June): +0.3% m/m | +2.7% y/y
• Core CPI (June): **+0.2