In May, inflation reported at 2.4% year-on-year remained relatively stable, primarily due to reduced gasoline prices, which counterbalanced rising costs for groceries and rent. While the tariffs imposed by President Trump are starting to affect specific goods like appliances and toys, the overall price levels have not yet shown significant change. Federal officials express concern that these tariffs could eventually reverse the progress made on inflation. Predictive analyses suggest a steady hold on interest rates as the Federal Reserve approaches possible future economic shifts.
The latest Labor Department report indicates that while inflation remains steady at a 2.4% annual increase, the effects of Trump's tariffs are beginning to surface.
Federal Reserve governor Adriana Kugler cautioned about the possible inflationary impacts of higher tariffs, predicting they will hinder the progress made in inflation control over the past two years.
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