June 10, 2026
May CPI Report - Over 4% For the First Time Since 2023
May’s inflation report saw prices rise 0.5% month-over-month and 4.2% year-over-year, led by energy prices which were up 3.9% in the month May and 23.5% over the past year. Core inflation, which excludes volatile food and energy prices was up 0.2% in May and 2.9% over the past 12 months. Today’s release matched consensus expectations. The key question going forward is how the Federal Reserve will respond to the energy price shock. Year-to-date, the market has adjusted expectations from 50bps of cuts to 25bps of hikes. The next FOMC meeting is June 17th. It is reasonable to expect year-over-year inflation to begin decelerating from here. In May, unleaded gasoline prices averaged $4.50 per gallon. So far in June, the average price is down to $4.20 per gallon.
- Consumer prices (CPI) increased 4.2% year-over-year. In May, the year-over-year rise in the consumer price index (CPI) registered 4.2%, accelerating from 3.8% in April. Energy prices have been a primary driver (+23.5%). Shelter inflation is also playing a role, with a 35% weight in the CPI basket (+3.4%). These higher prices offset more muted price increases in core goods (+1.1%) as the impact of tariffs is beginning to abate.
- Consumer prices (CPI) rose 0.5% month-over-month. In May, consumer prices rose 0.5% month-over-month led by higher energy (+3.9%) and shelter (+0.3%). Price increases were muted in Food (+0.2%) and core goods prices declined (-0.1%) due to declines in drug prices (-0.7%) and new vehicles (-0.3%).
