June 28, 2024 – 7:11 AM PDT
WASHINGTON (Reuters) – U.S. monthly inflation was unchanged in May as a modest increase in the cost of services was offset by the largest drop in goods prices in six months, drawing the Federal Reserve closer to start cutting interest rates later this year.
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The report from the Commerce Department on Friday also showed consumer spending rose marginally last month. It raised optimism that the U.S. central bank could engineer a much-desired “soft landing” for the economy in which inflation falls without triggering a recession and a sharp rise in unemployment. Traders raised their bets for a Fed rate cut in September.
“It helps the argument that inflation is looking better-behaved, which may well open the door to interest rate cuts later in the year,” said James Knightley, chief international…
