The Federal Reserve is widely expected to hold interest rates steady next week, with investors focused on new central bank projections that will show how much weight policymakers are putting on recent soft data and how much risk they attach to unresolved trade and budget issues and an intensifying conflict in the Middle East.

Inflation rose less than expected in May, a month when the effects of higher tariffs were starting to become more widespread.

Inflation moved up in May as Trump's tariffs threatened to filter into consumer prices, CPI report shows. Gasoline prices declined for fourth month

The Consumer Price Index rose 2.4 percent in May, from a year earlier, a reading that reflects only the initial impact of President Trump’s tariffs.

Inflation is expected to accelerate in the coming months on the back of the Trump administration's import tariffs.

Inflation ticked slightly higher in May, rising 2.4%, in line with expectations, according to the U.S. Consumer Price Index released Wednesday. Prices rose 0.1 percent for the month, according to the Bureau of Labor Statistics. The month-over-month increase is less than expected.

Former Treasury Secretary and Federal Reserve Chair Janet Yellen expects inflation to rise to “at least 3% or slightly over” due to tariffs, despite recent encouraging signs of price stabilization. During a CNBC interview,

The rate of inflation fell in the spring to the lowest level in more than four years even as high U.S. tariffs threatened to increase prices again. Is the bill from trade wars about to come do?