Lower US Import Prices Latest Soft Inflation Datapoint for Fed

U.S. import prices fell by the most in five months in May amid a broad decline in the cost of goods, the latest indication of muted inflation that strengthens the case for the Federal Reserve to cut interest rates this year.

The Labor Department said on Thursday import prices dropped 0.3% last month, the biggest decline since last December. Data for April was revised down to show import prices rising 0.1% instead of climbing 0.2% as previously reported.

Economists polled by Reuters had forecast import prices slipping 0.2% in May. In the 12 months through May, import prices fell 1.5% after decreasing 0.3% in April.



The report came on the heels of data on Wednesday showing consumer prices remained tame in May, supporting financial market expectations that the Fed would cut rates this year.

The calls for an easing of monetary policy are being driven by a slowing economy against the backdrop of worsening trade tensions between the United States and China. President Donald Trump in early May imposed additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza