While US inflation came in broadly in line with expectations, there are signs of softening in some key categories. While housing costs and vehicle prices continue to run hot, the outlook is improving rapidly. This should cement expectations for the Fed to keep rates unchanged tomorrow but the commentary around the decision is likely to remain hawkish.
US consumer price inflation for May is broadly in line with expectations. The headline rate rose 0.1%MoM or 4.0%YoY (consensus 0.1 and 4.1, respectively), down from 4.9% and the slowest rate of headline inflation since March 2021. Meanwhile, core CPI (excluding food & energy) rose 0.4%MoM / 5.3% (consensus 0.4% / 5.2%). This is down from 5.5% and is the slowest annual rate for core inflation since November 2021.