The inflation figure was lower than some economists’ expectations, meaning they now believe a rate cut this year is more likely, but it remains above the US central bank’s 2% target.
People in the US are still feeling the pinch of rising rents and electricity, while food inflation remained at about 2%.
The rate of US inflation varied for other goods and services.
The pace of price rises for transport, such as taxi rides, rose by more than a tenth in the year to May while the used car inflation fell by almost a tenth.
Lindsay James, investment strategist at Quilter Investors, said that despite the fall in inflation markets “remain stuck in a holding pattern”.
“[We are] waiting for either inflation to come down more quickly towards the 2% target, or for the economy to buckle under the strain and require a fresh bout of stimulus.”
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