US Consumer Price Inflation Accelerated in May
US CPI rose more than expected last month, underlining the case for a faster pace of monetary tightening by the Fed. The US Labor Department reported, that CPI rose by 2.8% yoy in May, up from 2.5% in the previous month. The consensus forecast was for a reading of 2.7%.
Meanwhile, Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, grew by 0.2% mom, above the forecast for growth of 0.1%. On annual basis, core CPI rose by 2.2%, from 2.1% a month earlier. Economists expected a 2.2% growth.
The inflation data was published ahead of the Federal Reserve's two-day policy meeting. The US central bank tracks a different inflation measure, which is just below its 2% target. The Fed is expected to raise interest rates for a second time this year on Wednesday to a range of 1.75%-2%. Economists are divided on whether policymakers will signal one or two more rate hikes in their statement accompanying the rate decision.