U.S. inflation registered its largest increase in five months in June and provided little indication whether tariffs were triggering price pressures.

The shelter index rose 0.2 percent in June, and the Bureau of Labor Statistics noted that it was the primary factor in last month’s increase.

Still, on a 12-month basis, shelter inflation eased to 3.8 percent.

Energy prices were another major contributor to the CPI, climbing 0.9 percent from May to June. This was fueled by a 1 percent surge in the gasoline index.

This could have been a one-time price movement driven by geopolitical tensions in the Middle East that sent crude oil prices soaring. They have since fallen and are trading below the pre-conflict levels.

Food prices also climbed 0.3 percent monthly.

After soaring at the beginning of the year, egg prices have stabilized, tumbling for the fourth straight month. In June, they plunged more than 7 percent.

New inflation data were still mixed as to the extent of the impact that tariffs are having on consumer prices.

The indexes for new vehicles and used cars and trucks declined by 0.3 percent and 0.7 percent, respectively. Prices for apparel, a tariff-sensitive product, increased by 0.4 percent.

Yields on U.S. Treasury securities were mixed, with the benchmark 10-year yield hovering around 4.42 percent.

The U.S. dollar index, a measure of the greenback against a weighted basket of currencies, edged slightly higher, firming above 98.00.

“Fortunately, the report this morning was mostly in line with expectations, and the core [ex-food and energy] numbers told a story of inflation that was in check,” Chris Zaccarelli, CIO for Nightlight Asset Management, said in a note emailed to The Epoch Times.

Reserve to lower interest rates at this month’s policy meeting.

CME FedWatch Tool data suggest that the futures market is overwhelmingly expecting a September rate cut.

The odds of a rate cut could change if the inflation figures evolve, Zaccarelli noted.

However, truflation, a popular real-time running inflation estimate relying on a treasure trove of data points, suggests inflation remains below 2 percent.

While market-watchers are laser-focused on month-to-month inflation readings, Treasury Secretary Scott Bessent says it is essential to monitor the trend, not one CPI print.

He noted that Wall Street and economists have gotten it wrong by proclaiming that tariffs would trigger an immense price level increase, “which just hasn’t happened,” he said.

Josh Rubin, client portfolio manager at Thornburg Investment Management, agrees, saying that it remains unclear how much impact tariffs are having on inflation.

“We likely won’t see clear signals until the effects flow through the entire economic system, specifically when retailers or suppliers begin passing through the new normal in the cost structure of imported goods, both in terms of tariffs and the weaker dollar,” Rubin said in a note emailed to The Epoch Times.

Tariffs typically function with a lag, and economic observers suggest they might obtain a better understanding of tariff-driven inflation by the summertime data.

Ahead of President Donald Trump’s sweeping global tariffs, companies significantly accelerated their imports, rushing to beat the levies. This allowed retailers and other businesses to stock up their inventories.

It remains to be seen whether they will pass higher costs onto customers or absorb them once their supplies are exhausted and they import tariffed foreign goods.

“We’re still at the beginning of seeing how tariffs might have an asymmetric impact on U.S. companies compared to international ones, so those tailwinds still have room to play out,” Rubin said.

Market-watchers will obtain more clues this week when the producer price index—a measure of prices paid for goods and services by businesses—and trade prices are released on July 16 and July 17, respectively.

Consensus estimates suggest producer prices will increase at a modest pace of 0.2 percent. Import prices are projected to rise 0.2 percent, while export prices are forecast to decline 0.1 percent for the second consecutive month.

According to the Council of Economic Advisers, overall goods prices in the CPI and the Fed’s preferred personal consumption expenditures (PCE) price index have risen by an annualized rate of 1 percent and 0.1 percent from December 2024 to May 2025, respectively.

“The results clearly show the price of imported components declining, starting in March, while overall prices were close to unchanged or increased slightly,” the report stated.