Inflation: Moderating Trend
James Dorgan2025-06-25T08:38:46+01:00Year to year inflation in the EU dropped to 1.9% in May, just below the target, and seemingly vindicating the ECB's series of interest rate cuts. The situation in the US is not so clear since inflation is appreciably above 2%, the economy is running hot and there are uncertain implications for prices in the President's tariff policy. For the moment the Federal Reserve is holding its hand. In Ireland inflation increased from 2% to 2.2% n April driven by prices for food and services, especially hospitality . But the flash estimate for May is a decline. Considering demand brisk and unemployment low the economy has done well to record a moderation in price increases. A small decline in US inflation in April was a positive feature. But the possibility of price increases resulting from US tariff policy, has pushed expectations the other way. It seems unlikely that interest rates will be cut in the US anytime soon. Meanwhile, in Europe things are moving in the opposite direction with inflation falling and the economy still weak.