U.S. Inflation Slowed In May With Increase Of 0.1%

Summary

  • Both headline and core inflation numbers fell short of consensus estimates.
  • Gasoline prices fell 0.5% in May, following a 5.7% increase in April. Gas prices could be a deflationary force in coming months.
  • May’s mild inflation report leaves the door wide open for the Federal Reserve to begin cuts in short-term interest rates.

This report looks like good news for the stock and bond markets, because it reinforces the Federal Reserve’s likely plan to begin lowering short-term interest rates, possibly twice in 2019. The first cut could come next week, or possibly in July.

Read my full analysis on SeekingAlpha.com

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About Tipswatch

Author of Tipswatch.com blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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