The May Consumer Price Index (CPI), a principal measure of inflation that tracks changes in the prices consumers pay for a broad basket of goods and services, was released earlier today for the month of April. The data revealed a modest 0.2% month-over-month increase, while prices rose 2.3% on a year-over-year basis. Notably, shelter costs continued their upward trajectory, increasing 0.3% in April and accounting for more than half of the overall monthly increase. Meanwhile, energy prices rose 0.7%, driven by gains in natural gas and electricity, which more than offset the decline in gasoline prices.
CPI Home: U.S. Bureau of Labor Statistics (bls.gov)
The table below shows m/m percentage changes in CPI indexes which include Core CPI, Food and Energy (Core CPI excludes Food and Energy).
Source: Consumer Price Index Summary (bls.gov)
Price stability, one of the two primary objectives of the Federal Open Market Committee (FOMC), continues to remain above the target range of 2%. In the Federal Reserve’s statement released on May 7th, members reiterated their commitment to using all available policy tools to bring inflation back to the target level. The FOMC’s next decision regarding Federal Funds rate is scheduled to be announced on June 17th-18th, 2025. The CPI summary for April is scheduled to be released on June 11th, 2025.
Inflation continues to move steadily toward the FOMC long-term target of 2.0%, laying the groundwork for policymakers to begin a gradual normalization of interest rates. Current market expectations reflect the possibility of three 25-basis-point rate cuts by the end of 2025, with the first anticipated around September. Looking ahead, the next FOMC meeting is scheduled for June 17th-18th; however, no changes to the current policy stance are expected at that time.
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