WASHINGTON—Consumer prices rose at their fastest pace in five months in June, fueled by higher costs for certain goods—a sign that tariffs may be starting to influence inflation, possibly prompting the Federal Reserve to hold off on any interest rate moves until at least September, Reuters reported.
The Labor Department’s report on Tuesday showed a notable increase in the Consumer Price Index (CPI), though underlying inflation pressures remained relatively contained. Prices for both new and used vehicles declined compared to May, helping to moderate the overall inflation trend despite the broader uptick, Reuters said.
“Services like airline fares as well as hotel and motel rooms were also cheaper in June. Softening demand as consumers hunker down is limiting price increases for these services, a trend that, if sustained, could ease concerns of a broad-based rise in inflationary pressures,” Reuters said.
America's Credit Unions Senior Economist Dawit Kebede said the data mark a concerning upward trend in inflation.
"Reversing earlier progress toward the Federal Reserve’s target," Kebede said. "This trajectory reinforces the Federal Open Market Committee’s cautious stance of waiting for additional data before implementing rate cuts."