Inflation holds steady as data shows how prices are faring after Trump's ‘Liberation Day' tariffs
Inflation held steady last month, according to data that gives the first glimpse of how prices are faring since President Donald Trump's sweeping 'Liberation Day' tariffs.
Consumer prices rose 0.1 percent on a monthly basis in May, while annual inflation stood at 2.4 percent, according to the Department of Labor's consumer price index. Last month, the year-long inflation stood at 2.3 percent.
The report captures the period after Trump unveiled his global reciprocal tariffs in April and provides some insight as to whether businesses are bearing the brunt of the duties themselves or passing them on to customers.
Trump touted the figures as a success and called on the Federal Reserve to lower interest rates. 'CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT,' the president said on Truth Social Wednesday. 'WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!'
While analysts predicted a bigger increase, some still warned that the future is uncertain because tariffs keep changing.
'So far, inflation risks from higher tariffs are subdued,' Win Thin, global head of markets strategy at Brown Brothers Harriman, told Bloomberg. 'Nonetheless, U.S. protectionist trade policy and uncertainty about the ultimate level of tariffs are downside risks to growth and upside risk to inflation. Bottom line: the fundamental USD downtrend is intact.'
The stock markets responded positively to the news with all the major indexes pointing up to start the trading day.
Since Trump announced his global reciprocal tariffs and the stock market was spooked, many of the duties were paused. However, 10 percent tariffs for most countries remain.
Inflation has been slow to respond to the tariffs as most retailers are selling merchandise accumulated before the import duties took effect.
Economists said that the reduction in the scale of some trade tariffs may have 'helped to restrain cost increases thus far,' Wells Fargo's Sarah House and Nicole Cervi said. 'That said, as the higher tariff regime persists, shielding consumers from the costs is likely to become more challenging,' the economists added.
'Only a few goods prices likely rose as a result of the new tariffs in May,' Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note, Bloomberg reports. 'June will be a different story — while some providers of discretionary services probably cut prices or kept them low to sustain demand.'
Walmart warned customers last month that they could see price rises because of the trade tariffs. The retailer's chief financial officer John David Rainey said that the tariffs are 'still too high.'
'It's more than any supplier can absorb. And so I'm concerned that consumer is going to start seeing higher prices,' he said. 'You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June.'
Reuters contributed reporting
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While distributions taken from a Roth IRA account are tax-free, distributions are counted as untaxed income on the following year's Free Application for Federal Student Aid (FAFSA). In other words, using a Roth IRA for college can reduce eligibility for need-based aid. However, the impact depends on the amount of money withdrawn and which year of school the distribution is made. If you're on the fence about making a Roth IRA education withdrawal, consider the advantages and disadvantages that could apply to your situation. Using a Roth IRA for college can reduce reliance on student loans. Parents who want to help their children avoid student loan debt can use Roth IRA funds to lessen the burden of borrowing. Roth IRAs can be invested for long-term growth. Money invested in a Roth IRA can be invested in stocks, bonds, ETFs, index funds and more, giving you plenty of options to customize your investment. You get tax-free growth. 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Revenue: $1.53 billion vs analyst estimates of $1.51 billion (10.5% year-on-year decline, 1.6% beat) EPS (GAAP): $1.51 vs analyst estimates of $1.47 (2.7% beat) Adjusted EBITDA: $144.9 million vs analyst estimates of $164.2 million (9.5% margin, 11.8% miss) The company dropped its revenue guidance for the full year to $6.4 billion at the midpoint from $6.8 billion, a 5.9% decrease Operating Margin: 8.8%, down from 11.4% in the same quarter last year Backlog: $2.29 billion at quarter end, down 26.7% year on year Market Capitalization: $3.82 billion KB Home's second quarter results for 2025 were met with a negative market reaction, as several evolving market headwinds weighed on performance. Management pointed to subdued demand during the spring selling season, with CEO Jeffrey Mezger citing that "affordability challenges have persisted compounded by the variability in mortgage interest rates, which remain elevated as well as macroeconomic and geopolitical uncertainty." 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While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
