Inflation is slowing down, according to the Bureau of Labor and Statistics (BLS) consumer price index report. Newly released Wednesday, the May report notes inflation maintained the same rate as April. 

“Inflation cooled down in May following four consecutive months of high readings”, said America’s Credit Unions Senior Economist Dawit Kebede. “Both headline and core inflation rose less than anticipated compared to prices a year ago. The Federal Reserve is expected to maintain rates steady in today's meeting. However, a similar report in the coming months could prompt a change, potentially leading to at least two rate cuts this year, despite strong job gains.” 

Also Wednesday, the Federal Open Market Committee (FOMC) agreed to maintain the current target range for the federal funds rate between 5.25 to 5.5% during its two-day meeting.   

“The FOMC held rates at current levels and revised its rate outlook to show just one cut in 2024, down from three in the March estimate. Committee member projections called for little progress on inflation on a year-over-year basis over the remainder of 2024, which Chair Powell attributed to base effects as inflation was relatively soft in the latter half of 2023. Nevertheless, America’s Credit Unions believes another month of encouraging inflation data would put two rate cuts during this calendar year squarely on the table,” said America’s Credit Unions Deputy Chief Economist Curt Long.  

The FOMC next meets July 30-31.