The United States is bracing for the release of the Consumer Price Index (CPI) data for May to drop any day now. Analysts are predicting this report to be the biggest monthly spike in inflation on record. Keep an eye out for this report soon. It’s important because it could provide the first concrete evidence of how President Donald Trump’s recently enacted tariff policies are impacting consumer prices.
An 2.5% increase in the annual inflation rate — as expected by many economists — would be reflected by the CPI for the month of May. Investors and analysts are all a-tingle over the expected increase. This is how they’d like to assess the impact of tariffs on the broader economy. Adding to fears, the administrative tariffs have raised concerns that they would add upward price pressure — serving to raise inflation even further.
Prior to this very high impact report investor sentiment had recently shifted to a risk-off approach. With the release of data still awaited, gold prices have found it difficult to hold onto bullish advances. The yellow metal has seen some tiny intraday gains, however. It’s still under important resistance on all fronts as traders are cautious to pull the trigger ahead of expected CPI report.
“Gold price struggles to capitalize on intraday move higher as traders keenly await US CPI report.”
US Dollar buoyed as US-China trade relations optimism continues to soar This positive development may play an important role in setting the mood for next week’s CPI data. Buyers and sellers have been positioning themselves ahead of that report. Consequently, major currency pairs such as EUR/USD and GBP/USD are reacting erratically. EUR/USD has bounced back north of 1.1450, a modest move higher as the market turns its attention to forthcoming US data.
GBP/USD is struggling to get its bearings. It further holds under the 1.3500 mark as investors position themselves to ride out volatility expected following the CPI release. The Pound Sterling has faced additional pressure due to a disappointing employment report from the UK, compounding its defensive stance.
“GBP/USD remains offered below 1.3500 ahead of US CPI release.”
Market participants are acutely aware that the details within the CPI report could have significant implications, particularly regarding pricing strategies and future economic forecasts. Investors were watching these developments keenly for early signals of where inflationary forces are heading and how that might shift monetary policy going forward.
The nervously excited tone around this CPI data is indicative of the bigger picture sentiment in the markets today. Preventive tariffs are more troubling. Heightened concern comes with tariffs about their impact on short term consumer prices and long term economic conditions.
“US CPI data expected to show May inflation increase amid looming Trump’s tariffs impact.”