Investing.com -- Inflation in the U.S. rose at a slower pace yet again in May, potentially bolstering the case for the Federal Reserve to push pause on a long-standing policy tightening campaign later this week.
The country's consumer price index for the month increased by 4.0% on an annual basis, down from 4.9% in April, according to data from the Bureau of Labor Statistics on Tuesday. Economists had expected the number to cool to 4.1%.
It was headline inflation's eleventh straight month of easing and the slowest rate in two years, but the figure still remains double the Fed's stated 2% target. Month-on-month, the reading inched up by 0.1%, decelerating from 0.4% in the prior month.
Meanwhile, core prices, which strip out more volatile items like food and energy, rose by 5.3% annually and 0.4% monthly, in line with estimates.
The numbers could factor into the decision-making process of Fed policymakers as they begin a crucial two-day meeting today.
The Fed has been raising interest rates for more than a year to combat elevated inflation, so the CPI print is expected to play a pivotal role in whether the central bank chooses to temporarily halt its tightening cycle or hike borrowing costs further.
According to Investing.com's Fed Rate Monitor Tool, at 08:46 ET, there was a more than 80% chance that Fed officials will keep the benchmark rate steady at a range of 5.00% to 5.25%, while the probability that the bank will unveil a 25 basis point increase stood at just under 20%.