The Consumer Price Index (CPI) of the United States was at 2.7% year-on-year in June, which represents a three-tenths acceleration compared to the cost of living increase in May, according to the Bureau of Labor Statistics.
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In the case of core inflation, which excludes food and energy prices from its calculation due to their higher volatility, the rate closed June with an increase of 2.9%, one tenth above the reading for May.
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During June, the price of food increased by 3% year-on-year, one tenth more than in May, while energy prices decreased by 0.8%.
On a monthly basis, the overall CPI variable increased by 0.3%, following a 0.1% advance in May, which represents the largest price increase on a monthly basis since January 2025.
Why did inflation increase in the United States?
“The tariffs are starting to make themselves felt in the details of the CPI and this, combined with the good labor market data, will calm those at the Fed who are pushing for the central bank to cut interest rates at the end of this month,” points out Ryan Sweet, chief economist for the United States at Oxford Economics, who notes that tariffs impact prices with a delay, as companies tend to have inventory for two to three months."
In this way, the expert maintains the forecast that consumer price increases will accelerate during this summer and fall, as the boost from tariffs on goods prices will more than offset the moderation in inflation in services.
Regarding the impact on the Federal Reserve’s upcoming decisions, it is considered that the US central bank is aware of a lag between changes in tariffs and their impact on inflation. Therefore, it anticipates that it will “stay on the sidelines while upward pressure on basic goods prices intensifies” until more clarity is obtained on the recently announced tariffs, which are set to take effect on August 1.
Likewise, Sweet points out that the depreciation of the dollar represents another emerging risk to inflation to consider in the second semester, as a weaker dollar increases the likelihood of companies passing on a greater portion of tariffs to prices.
On the other hand, James Knightley, an analyst at ING Research, points out that the core inflation reading for June was slightly weaker than expected, which keeps alive the possibility of a Fed interest rate cut in September, but he considers that, given the risk of seeing worse data for July and August, clear evidence of labor market deterioration would be necessary for the central bank to act before the September meeting.
“We suspect that most members of the FOMC (Federal Open Market Committee) will want to ensure that tariffs are a one-time price change rather than something that leads to a more persistent inflation,” noted the expert, who doubts they have enough evidence to be certain at the September meeting, suggesting that President Trump’s frustration with Jerome Powell “will intensify.”