U.S. Inflation Turned To Deflation In May, Dropping 0.1%

Summary

  • 12-month inflation has dipped to 1.9%, down from 2.7% in February.
  • Core inflation is up 1.7% over the last year, also in a downward trend.
  • Will the Federal Reserve back off on interest rate increases? Not likely today, but possible in the future if this trend continues.

Holders of Treasury Inflation-Protected Securities and I Bonds are also interested in non-seasonally adjusted inflation, which is used to adjust the principal balances on TIPS and set future interest rates for I Bonds. May’s inflation index was set at 244.733, up 0.09% from April.

Read my full analysis on SeekingAlpha.com

Also, I have updated my Tracking Inflation and I Bonds page with these new numbers.

And here are the new July inflation indexes for TIPS.

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