Headline inflation matched expectations while core CPI rose 0.2% month-over-month, easing pressure on the Federal Reserve.
US consumer prices rose 4.2% year-over-year in May, matching forecasts and holding steady from an unrounded 3.811% prior. Month-over-month, headline CPI increased 0.5%, in line with expectations, following a 3.8% prior reading.
Core CPI, excluding food and energy, climbed 0.2% month-over-month, below the 0.5% estimate, while the annual rate held at 2.9%. Shelter costs rose 0.6% month-over-month, matching April’s gain, while gasoline surged 5.4% from the prior month.
Markets had priced in 11.7 basis points of rate hikes for September and 25.3 basis points for December ahead of the report.