BLUF: The federal government’s Bureau of Labor Statistics (BLS) released data showing that May’s price inflation decelerated, with the year-over-year increase being the lowest in twenty-six months. Consumer Price Index (CPI) inflation rose 4.0 percent year over year in May, down from April’s increase of 4.9 percent. This marks the twenty-seventh consecutive month with inflation above the Fed’s 2 percent target. Food prices continued to rise, while energy prices fell. Shelter prices slightly slowed in their year-over-year growth. Real wages declined for the twenty-sixth month in a row. “Core inflation,” excluding food and energy, decreased to 5.3 percent in May, but still remains high. Although the market considers this slight deceleration a victory over inflation, it is uncertain whether the Federal Open Market Committee (FOMC) will hold off on further interest rate hikes. The Fed has been pushing down interest rates, leading to monetary creation and inflation, rather than allowing market rates to determine the correct interest rates. The Fed’s intervention in interest rates hinders the ability to effectively combat inflation.
By Intelwar
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