Consumer price rises in the US eased slightly last month, official data suggests, ahead of a key meeting where policymakers will publish their latest interest rate decision.
According to the US Labor department, prices rose 3.3% in the year to the end of May, down 0.1 percentage points from the month before.
Core inflation, which strips out more volatile items like food and energy prices, also slowed despite rents continuing to weigh on household budgets.
Despite borrowing costs standing at their highest rate in years, officials at the Federal Reserve are expected to hold off on any interest rate cuts this month.
The inflation figure was lower than some economists’ expectations, meaning they now believe a rate cut this year is more likely, but it remains above the US central bank’s 2% target.
People in the US are still feeling the pinch of rising rents and electricity, while food inflation remained at about 2%.
The rate of US inflation varied for other goods and services.
The pace of price rises for transport, such as taxi rides, rose by more than a tenth in the year to May while the used car inflation fell by almost a tenth.
Lindsay James, investment strategist at Quilter Investors, said that despite the fall in inflation markets “remain stuck in a holding pattern”.
“[We are] waiting for either inflation to come down more quickly towards the 2% target, or for the economy to buckle under the strain and require a fresh bout of stimulus.”