The U.S. Federal Reserve is widely expected to pause its interest rate increases today (June 14) as data shows that inflation in America has fallen to its lowest level in more than two years.
The U.S. Bureau of Labor Statistics reported that May’s core Consumer Price Index (CPI), which excludes volatile food and energy prices, came in at 4% year-over-year, its lowest level since March 2021.
The latest inflation reading has 90% of traders saying that they expect the U.S. central bank to hold interest rates at the current range of 5% to 5.25% following today’s policy meeting.
Fed Chair Jerome Powell has said that he would prefer to skip an interest rate increase in June, while leaving the door open to future rate hikes if needed.
While U.S. core inflation declined on an annual basis in May, it ticked up 0.4%, its third consecutive monthly increase.
Total inflation increased at a smaller pace of 0.1% in May, helped by lower gas prices throughout America.
The U.S. gasoline price index fell 5.6% in May, while grocery prices inched higher after falling in the two previous months.
U.S. inflation peaked at 9.1% in June 2022. Since then, the U.S. Federal Reserve has raised interest rates 10 consecutive times, bringing its trendsetting Fed Funds rate to its highest level in more than 20 years.
