U.S. Inflation Slows in May, CPI Rises 0.1%

The U.S. Consumer Price Index (CPI) for May showed a softer-than-expected increase, providing a glimmer of hope on the inflation front. The CPI rose by 0.1% in May, falling short of economist forecasts which had anticipated a 0.2% increase. This marks a slowdown from April's 0.2% rise.

On an annual basis, the CPI climbed by 2.4%, slightly below the estimated 2.5% and April's 2.3%. This indicates a modest acceleration in inflation compared to the previous month but remains within the expected range.

Core CPI, which excludes the volatile food and energy sectors, also rose less than anticipated, increasing by 0.1% in May. This was below the forecasted 0.3% and April's 0.2% rise. On a year-over-year basis, core CPI stood at 2.8%, matching April's rate and slightly below the expected 2.9%.

Despite the softer-than-expected inflation data, there remains uncertainty about the trajectory of inflation. However, market sentiment continues to lean towards the Federal Reserve beginning to ease monetary policy later this year. This outlook is supported by the expectation of two rate cuts, with the first anticipated in September and the second in December, according to market pricing.