Inflation Lowest Since 2021
May 14, 2025
Inflation in the US dipped to its lowest rate since early 2021, but will the Federal Reserve Bank cut interest rates? The Consumer Price Index (CPI) from the Bureau of Labor Statistics reports that consumer prices increased 0.2% in April, making the annual inflation rate 2.3%. CPI is the most comprehensive metric of its type and is considered a lagging indicator, and a measure of the effectiveness of government fiscal and monetary policy. At 2.3%, the rate is still above the 2.0% target of the Federal Reserve .
The Federal Open Market Committee (FOMC) judges that inflation of 2% over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve’s mandate for maximum employment and price stability.
The 2% target has been the Fed’s policy approach for interest rates since 2012, with some critics arguing that a review of this inflation goal is warranted.
