The U.S. Consumer Price Index (CPI) is showing a more moderate inflation rate, with a forecasted year-over-year increase of around 3.0% to 3.3%, down from the higher peaks seen in 2022 and 2023.

This slowdown in inflation is primarily due to easing energy prices, stabilized food costs, and the gradual resolution of supply chain disruptions. While inflationary pressures remain in certain sectors like housing and wages, the Federal Reserve’s interest rate hikes appear to be effectively curbing broader price increases. Core CPI, which excludes volatile food and energy prices, remains slightly elevated at 4.0% to 4.2%, driven by persistent demand in services and housing. Although inflation has cooled, the all-items index rose 2.4% for the 12 months ending in May, which remains above the Federal Reserve’s target of 2%, with the economy continuing to face upward price pressures in specific goods and services.