WASHINGTON–Inflation picked up speed in June, according to new federal data, with analysts saying President Trump’s tariffs are starting to be felt in the economy.

The rising inflation suggests the Federal Reserve will not move to lower interest rates when it meets later this month.

The Consumer Price Index rose 2.7% compared to one year ago, the fastest pace since February, according to the Bureau of Labor Statistics. That is up from 2.4% in May.

The BLS said that so-called core inflation, which removes the more volatile food and energy prices and is viewed as being a more reliable gauge for underlying price pressures, was also up 2.9% over one year ago.

The Fed’s inflation target is 2% annually.

America’s CUs Responds
“June prices increased in line with consensus expectations, with headline inflation accelerating while core prices ticked up slightly.  Commodity prices, particularly sensitive to tariffs, edged higher overall. However, declining vehicle prices helped offset some of the broader increases,” said America’s Credit Unions Senior Economist Dawit Kebede in a statement. “The data marks a concerning upward trend in inflation, reversing earlier progress toward the Federal Reserve’s target. This trajectory reinforces the Federal Open Market Committee’s cautious stance of waiting for additional data before implementing rate cuts.”

Other Price Increases

The new federal data show that over the course of the month, prices rose 0.3%, a notable pickup from a 0.1% increase in May. Core prices rose 0.2%.

According to the New York Times analysis, products most exposed to tariffs, like household furnishings, saw prices jump 1%, significantly higher than the 0.3% rise last month. Prices for appliances, specifically, rose 1.9%, up from 0.8%. The apparel index increased 0.4%, snapping multiple months of declining prices

Gasoline prices rose 1% in June, after falling 2.6% the previous month. Grocery costs were up 0.3% in June. Prices for both new and used cars declined in June, while airfares slipped 0.1%.