Friday's Commerce Department report showed consumer prices flat from April to May, with a 2.6% rise from a year earlier, indicating a mild inflation performance in more than four years.
Excluding food and energy, core inflation rose 0.1% in May, the smallest increase since the spring of 2020, with a 2.6% rise compared to a year earlier, indicating the lowest increase in over three years.
Prices for physical goods dropped in May, with gasoline, furniture, and recreational goods' prices declining, while services prices increased slightly, hinting at a balanced inflation performance in different sectors.
The Fed may consider rate cuts in September if the current trend of easing inflation continues, as policymakers aim for sustainable slowdown towards the 2% target, potentially impacting consumer and business borrowing rates.
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