The just-released US inflation report for May 2025 shows core CPI only increased by 0.13% MoM.

The print was below all (!) the estimates presented by top economists surveyed by Bloomberg.

Importantly, if you look at the details of the print you can see that:

1) The much scared pick-up in goods inflation was mild

2) Rent of shelter keeps easing

3) The sticky inflation subcomponent (’’supercore’’) only increased 0.06% MoM

Taken at face value, this CPI print could easily look like one of the inflation reports we used to get before the pandemic.

It suggests inflationary pressures have eased to the point that they are basically aligned with the 2% inflation target.

A note of caution concerns goods inflation: the timeline of the May report only allowed for half the effective tariff rates to be incorporated in goods prices.

The real question is: will the Fed now shift dovish?

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This article was originally published on The Macro Compass. Explore the macro investor, asset allocator, and hedge fund community using this link .