After months of cooling U.S. inflation easing investor concerns, the trend could reverse when the May report drops Wednesday, as rising tariff-driven costs threaten to push consumer prices higher.
The annual rate of gains in the Consumer Price Index has been on a steady retreat this year, falling from 3% in January to 2.3% in April — the lowest reading in over four years. The trend has so far been fortuitous for President Donald Trump, who has repeatedly cited falling inflation to push for lower interest rates.
Yet, economists now expect that beautiful streak to break.
May Inflation Report: What Do Economists Expect?
The median forecast sees headline inflation ticking up from 2.3% to 2.5% in May, while core CPI, which strips out food and energy, is expected to rise from 2.8% to 2.9% year-over-year. Month-over-month, CPI is projected to remain steady at 0.2%, with core inflation accelerating to 0.3%, marking the fastest monthly gain since January.
This uptick comes on the heels of Trump’s tariff rollercoaster. On April 2, what he dubbed as ‘Liberation Day,’ he announced sweeping duties on all trade partners, later dialing them back to a 10% universal tariff with a 90-day negotiation period.
China, however, …