Key facts
- U.S. import prices rose 1.9% in May, surpassing economists' forecasts.
- The annual increase in import prices was 6.7%, the largest year-on-year rise since August 2022.
- Prices for imported fuels surged 12.5% in May, and imported capital goods increased by 1.3%.
- The Federal Reserve is expected to hold interest rates steady but may shift away from an easing bias.
U.S. import prices saw a larger-than-anticipated increase in May, driven by significant rises in fuel and capital goods prices. The monthly gain of 1.9% surpassed economists' forecasts of 1.0%, and the annual increase of 6.7% was the largest in nearly four years, signaling persistent inflationary pressures.
This surge in import prices follows upwardly revised figures for April and contributes to broader inflation concerns, with consumer and producer prices also recently posting substantial gains. The rise in oil prices, exacerbated by geopolitical tensions involving Iran and the U.S., is a key factor fueling this inflation.
Meanwhile, the Federal Reserve commenced its two-day policy meeting. While officials are widely expected to hold interest rates steady within the 3.50%-3.75% range, economists anticipate a shift away from an easing bias. The persistent inflation data, coupled with a stable labor market, influences the central bank's monetary policy outlook.