US Inflation Falls to 4%, Lower Than Expectations

Vignesh Karunanidhi
US Inflation Rate Falls to --%, Below Predicted Levels
Source: ZEE5

The United States CPI (Consumer Price Index) data for the month of May is in. According to the Bureau of Labor Statistics (BLS), inflation in the US has fallen to 4%. Additionally, this comes on a positive note, falling steadily from April’s 4.9%.

As per the BSL, All Urban Consumers (CPI-U) rose 0.4% in April on a seasonally adjusted basis. This is after increasing 0.1% in March. Housing primarily caused the monthly increase. Increases in the index for fuel and used automobiles and trucks followed housing.

The energy index gained 0.6% in April as a rise in the gasoline index more than offset drops in other energy component indices. The food index remained constant from March to April. The index for food consumed at home decreased by 0.2% while the index for food consumed away from home increased by 0.4%.

How will the Fed React to the May US inflation numbers?

The most recent inflation report coincided with the commencement of a two-day meeting by the policymakers at the Fed, aimed at deliberating on the subsequent measures to address the inflation situation in the country.

Since March 2022, the Fed has implemented a sequence of 10 successive rate increases, resulting in the benchmark federal funds rate being adjusted to the target range of 5 and 5.25 percent.

It is quite uncertain at the moment as to how the FED will react to the current inflation numbers. Whether the FED will hike the interest rate or try to curb it is something worth waiting for and watching.