MNI BRIEF: US May CPI As Expected, Keeps Fed On Track For Skip

U.S. core CPI rose 0.436% in May, its sixth consecutive month at 0.4% or higher, but headline cooled to a 0.124% rise from a month earlier, both largely meeting analyst expectations and keeping the Federal Reserve on track to hold interest rates steady at Wednesday's meeting.

From a year earlier, headline CPI eased to 4.0%, its lowest since March 2021, while core CPI slowed two-tenths to 5.3%. Shelter was the largest contributor to headline inflation, followed by used cars and trucks, the BLS said. Owners' equivalent rent came in at 0.5%, same as in April and meeting analyst expectations. Core goods prices and core services prices were both steady at 0.6% and 0.4%, respectively.

Former Fed policymakers and staffers told MNI the central bank would likely skip a hike at this meeting while keeping the door open to further tightening if needed.