CPI Growth Rate Rises from 2.4% in May to 2.7% in June
Core CPI Climbs 2.9%, Falling Short of Expectations
Tariff-Driven Inflation Becoming Visible, But Impact Seen as Limited
New York Stock Futures Rise... September Rate Cut Hopes Persist
The United States' Consumer Price Index (CPI) growth rate for last month exceeded market expectations. Analysts note that as the summer season begins, the effects of tariffs have started to gradually be reflected in prices.
However, the core CPI, which shows the underlying trend of inflation, has come in below market expectations for five consecutive months, leading to the assessment that tariff-driven inflation remains limited. As a result, expectations for a rate cut in September persist, and both S&P 500 and Nasdaq futures are rising in tandem.
According to the U.S. Department of Labor on July 15 (local time), the CPI for June 2025 rose 2.7% year-on-year. This figure exceeds the market forecast of 2.6% and represents a wider increase compared to May (2.4%). On a month-on-month basis, the index rose 0.3%, higher than May's 0.1%, but in line with expectations.
However, the core CPI, which excludes the volatile energy and food sectors, rose 2.9% year-on-year. This is a slight increase from May's 2.8%, but below the market forecast of 3.0%. On a month-on-month basis, it rose 0.2%, higher than May's 0.1%, but still fell short of the forecast of 0.3%. The core CPI is a key indicator for gauging the underlying trend of inflation and is closely watched by the Federal Reserve.
By category, increases in housing and energy prices were particularly notable. Housing costs rose 0.2% from the previous month. Energy prices increased by 0.9%, with gasoline prices jumping 1%. Food prices rose 0.3%, with both grocery and dining-out expenses increasing by 0.3% each. New car prices fell 0.3%, used car and truck prices dropped 0.7%, while apparel rose 0.4%. Medical services increased by 0.6%.
This CPI release drew market attention as it is the first inflation indicator of the summer, a period when the effects of tariffs are expected to become fully reflected in prices. Federal Reserve Chair Jerome Powell and other monetary policymakers have consistently warned about the possibility of rising prices during the summer. Their concern is that while companies have previously absorbed tariff costs by securing inventories in advance, after the summer, these inventories may be depleted, causing the increased tariff burden to be passed on to consumer prices.
However, since the core CPI came in below expectations, it appears that companies are still absorbing a significant portion of the costs resulting from tariffs.
Following the release of the June CPI report, as of 9:05 a.m. Eastern Time, S&P 500 and Nasdaq futures were up 0.4% and 0.71%, respectively, on the New York Stock Exchange.
Ian Lyngen, head of U.S. rate strategy at BMO Capital Markets, said, "Under normal circumstances, this report would trigger discussions of a Fed rate cut," adding, "However, unfortunately, the tariff pressures scheduled for August 1 are likely to cause the Fed to hold off on a rate cut."
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