For the third consecutive month, U.S. consumer prices have remained surprisingly resilient despite the sweeping tariffs imposed by President Donald Trump. The latest Consumer Price Index (CPI) report, released Wednesday by the Bureau of Labor Statistics, shows that inflation remains under control—even as media headlines and economic forecasts continue to warn of impending price shocks.
The May CPI rose 2.4% year-over-year, a slight uptick from April’s 2.3%, and below many economists’ expectations of a tariff-induced spike. Key indicators within the report showed mixed results:
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Food prices edged up slightly after a previous decline.
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Energy and gas prices fell, down 1.0% and 2.6%, respectively.
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Prices declined for used vehicles, airfare, and apparel, categories heavily impacted by global supply chains and subject to Trump’s tariffs.
Perhaps most notably, core inflation—which excludes food and energy—increased only 0.1% from April, keeping the annual rate steady at 2.8%. For all the alarm bells sounded by economists and Fed officials, real-world impacts from the tariffs have not yet materialized in consumer prices.
President Trump hailed the numbers as vindication of his economic strategy. Posting on Truth Social, he wrote:
“CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”
The call for a full percentage point rate cut puts renewed pressure on the Federal Reserve, which has been cautious amid concerns of potential inflation acceleration tied to ongoing trade disputes.
While some experts, like Wells Fargo’s Michael Pugliese, called the data a “good reading,” others cautioned against premature conclusions. Pugliese told CNN that it’s still too early to determine the exact effects of the tariffs, especially as many businesses had stockpiled inventory ahead of their implementation, delaying potential cost pass-through to consumers.
The New York Times echoed that view, noting that supply buffers and strategic purchasing may have temporarily blunted the inflationary effects many had expected.
Adding further weight to the day’s economic developments, President Trump announced that a trade agreement with China has been finalized, pending approval from both himself and Chinese President Xi Jinping. According to Trump, the deal will:
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Secure access to rare earth minerals,
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Maintain tariff regimes (55% U.S. on Chinese goods, 10% Chinese on U.S. goods), and
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Allow Chinese students to continue studying in U.S. universities.
If enacted, this agreement would represent a landmark shift in U.S.–China relations and a significant milestone in the administration’s trade strategy. While tariffs would remain in place, the structure suggests a move toward predictable, negotiated economic competition—a win in both strategic and economic terms.
