US CPI Prep

8:30 AM ET
US CPI YoY Forecast 2.5%, Previous 2.3% Range 2.8% / 2%
US Core CPI YoY Forecast 2.9%, Previous 2.8% Range 3.1% / 2.5%
US Core CPI MoM Forecast 0.3%, Previous 0.2% Range 0.5% / 0.2%
US CPI MoM Forecast 0.2%, Previous 0.2% Range 0.4% / 0%

Investment Bank Views
Societe Generale
Our base-case inflation outlook suggests that tariffs will lead to a temporary increase in inflation. Following this short-term effect, we expect inflation rates to stabilise within the 2.0-2.5% range fo r2026 and 2027. However, there are short-term risks associated with this outlook, primarily due to uncertainty regarding the size and timing of tariff implementations and the extent of price increases each month, which may result in heightened volatility in inflation readings. Additionally, there is a medium-term risk that tariffs could trigger a prolonged period of elevated inflation, potentially disrupting the Federal Reserve’s interest rate trajectory.
Inflation readings from February through April have shown limited upward movement due to tariffs, which we believe is likely due to the timing. With the release of the May CPI and upcoming inflation data in the coming months, we anticipate stronger evidence of the effects of tariffs on inflation.

Goldman Sachs
We estimate a 0.25% increase in May core CPI (month-over-month SA), which would raise the year-over-year rate by 0.1 pp to 2.9%. Our forecast reflects a decline in used car prices (-0.5%) reflecting a decline in auction prices, a slight increase in new car prices (+0.1 %), and a more moderate increase in the car insurance category (+0.4%) based on premiums in our online dataset. We expect another soft month of travel services inflation based on higher frequency prices measures: we forecast unchanged hotel prices and unchanged airfares. We have penciled in moderate upward pressure from tariffs on categories that are particularly exposed (such as apparel, recreation, and communication) worth +0.05pp on core inflation.

Credit Agricole
Inflation has been softer than expected over the last couple of months, though this largely covers a pre-tariff period. We think early signs could start to emerge in the May data, but the main impact may not be evident until the summer. In detail, we expect a relatively soft headline print indicating a 0.1% MoM increase, though unfavourable base effects would still see the YoY pace rise to edge up to 2.4% from 2.3%. Each of our 0.1% and 2.4% forecasts are close to rounding up. With energy likely to provide a drag on headline inflation, we see core a bit firmer at 0.26% MoM, which would result in the YoY pace ticking up to 2.9% from 2.8%.

If the data comes out as expected, it would do little to alter the Fed’s “wait- and-see” stance, in our view. As we expect only early signs of the potential tariff impact in May, we think the Fed will ideally want to parse at least a couple of more reports before deciding on any course of action.

BofA
If the economy can muddle through the next few months, the market narrative could shift to reflation. Next week’s May CPI report is likely to only show moderate tariff effects. But tariff collection climbed sharply in May, suggesting there is meaningful inflation in the pipeline for the summer. If that’s correct, the y/y rate could move up quickly due to favourable base effects.

Previous Market Reaction & Data
Dollar weakened, US Indexes Strengthened
US CPI YoY Actual 2.3% (Forecast 2.4%, Previous 2.4%)
US CPI MoM Actual 0.2% (Forecast 0.3%, Previous -0.1%)
US Core CPI YoY Actual 2.8% (Forecast 2.8%, Previous 2.8%)
US Core CPI MoM Actual 0.2% (Forecast 0.3%, Previous 0.1%)