Soft CPI for May shows tariffs not yet overwhelming
The first inflation reading for May should be heartening, if not a little befuddling to policymakers with CPI coming in much softer than expected. May’s reading was, so far, the biggest test about the speed and magnitude to which tariffs are affecting consumer prices, and core goods prices overall showed little signs of firmness. The lack of tariff effects could plausibly reflect the front loading of inventories and attempts to push out price increases for as long as possible while firms wait to see how trade policy shakes out. Though trade rhetoric has de-escalated since Liberation Day, tar...