News Release
Bureau of Labor Statistics
July 15, 2025
C ONSUMER P RICE I NDEX – J UNE 2025
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally
adjusted basis in June, after rising 0.1 percent in May, the U.S. Bureau of Labor Statistics reported
today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.
The Federal Reserve has been keeping the fed funds rate on hold because it isn’t clear yet what impact the Trump tariffs will have on inflation. But the Cleveland Fed’s Inflation Nowcasting report has shown that their estimate of 3Q25 CPI inflation has been trending upward through July. It’s now firmly above the Fed’s 2% inflation goal.
The impact of President Trump’s tariffs has just begun with a very slight increase in goods prices. But the real impact will start on August 1 assuming there isn’t another delay. The critical season for holiday shipments is in the fall. The question is how much of the tariff price increases will be passed through to the customer.
Long-term Treasury yields have been trending upward for the past week and rose on the inflation news even though the fed funds rate was stable. The bond market controls the long-term yields and higher inflation causes bond traders to demand an inflation premium.
Today’s inflation report will keep the Federal Reserve on hold wrt the fed funds rate. The bond market would respond to a premature fed funds cut by raising long-term yields due to increased inflation expectations.
Wendy