Consumer price increases in the United States likely slowed sharply last month, extending a steady easing of inflation over the past year
Though a resilient economy is great for households and businesses, it may also be helping fuel chronically high inflation. Some economists argue that companies are keeping prices high to maintain larger profit margins. The nation's consumers might have to pull back, en masse, before most businesses will reduce prices. In the meantime, steadily robust hiring is allowing Americans, as a whole, to keep spending.
it's skipping a rate increase but perhaps also hint that it will resume raising its key rate as soon as JulyTop Fed officials have said they're leaning toward a so-called “skip” because they want to take time to assess how their rapid rate hikes have affected inflation and the overall economy. The Fed has raised its benchmark rate by a hefty 5 percentage points over the past 15 months — the fastest pace of rate increases in four decades.and business borrowing.
Yet any sharp declines in May and June will in part reflect the fact that prices soared in both those months last year. As those months drop out of the year-over-year inflation calculations, they are replaced with smaller monthly gains. The effect can sharply lower measures of annual inflation. Alan Detmeister, an economist at UBS, projects that higher rents and used car prices will account for about three-quarters of the May increase in core inflation. Yet he thinks both items will likely decline in the coming months. Wholesale prices of used cars have already started dropping. And rental costs are expected to fall because apartment vacancy rates have climbed.
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