June CPI Report Forecasts Show Inflation Ticking Higher as Tariff Impact Emerges

Key Takeaways

• Inflation likely accelerated in June 2025 against the backdrop of the Trump administration’s new tariffs, which are beginning to put upward pressure on prices.
• Analysts say rising prices for core goods will drive that acceleration, along with rising prices for services prices, excluding housing.
• Bond futures markets see 60% odds of an interest rate cut from the Federal Reserve in September.

Forecasts for June’s Consumer Price Index report show that inflation likely ticked up during the month as President Donald Trump’s new tariffs begin to push consumer prices higher.

For months, investors have been bracing for signs that aggressive new trade policies will slow economic growth by raising prices and denting demand. The waiting game has also complicated the calculus at the Federal Reserve, which has held interest rates steady amid uncertainty surrounding the outlook.

“Jerome Powell and the rest of the Fed committee have been anticipating higher prices or inflation to be restimulated, primarily from the tariffs that have been put in place and those yet to come,” says Russell Price, chief economist at Ameriprise Financial. “But we haven’t seen it yet.”

That could change in June.

Overall, economists expect that consumer prices rose 0.23% on a monthly basis and 2.6% on an annual basis, according to FactSet’s consensus estimates. Excluding volatile food and energy prices, economists expect 0.30% monthly core inflation and 3.0% annual core inflation in June. Data in line with these forecasts would be a significant change from May, when inflation came in softer than analysts anticipated.

Ameriprise’s Price is anticipating 0.30% growth in June for both overall and core inflation. Zooming out, he expects the impact of tariffs to peak in the fourth quarter of 2025, then lessen in 2026.

June CPI Report Highlights

• CPI report release date and time: Tuesday, July 15 at 8:30 a.m. Eastern time.
• The CPI is forecast to rise 0.23% in June after rising 0.10% in May.
• Core CPI is forecast to rise 0.30% in June after rising 0.10% in May.
• The CPI year over year is forecast to rise 2.6% in June after rising 2.4% in May.
• Core CPI year over year is forecast to rise 3.0% in June after rising 2.8% in May.

Goods Prices to Rise in Early Sign of Tariffs

Economists from Bank of America expect that a rise in core goods prices will be the main driver of the acceleration of inflation in June, citing “broad-based price hikes … owing in part to tariffs.” They are also looking for an uptick in prices in the services category, including hotels and airfares, as well as in medical services.

Price says he’ll be watching for signs of tariff pressure in high-turnover categories like food. He says gasoline prices, which remained within their usual seasonal pattern in June, are unlikely to cause a major surprise in next week’s data.

Meanwhile, falling shelter prices could offset higher inflation in other categories.

Falling Auto Prices Could Offset Some Inflationary Pressure

While some economists expect rising car prices to be one of the first—and most dramatic—impacts of tariffs on the new economy, Price says he expects that category to exert downward pressure on inflation, offsetting upward pressure in other categories. “It could be the opposite of what most people expect,” he says.

While some imported cars could be subject to significantly higher tariffs, Price says sellers are not yet able to pass those costs along to consumers. He points to unusually elevated demand for cars back in March and April, before the onset of the tariffs. “Automobile prices probably are going to be under pressure because demand has moderated,” he says.

When Will the Fed Cut Rates?

With inflation still above the Fed’s target, analysts don’t expect the central bank to cut interest rates at its upcoming July meeting. The Fed has held rates at their current range between 4.25% and 4.50% throughout 2025.

Bond futures traders see just a 7% chance of a cut later this month, according to the CME FedWatch Tool. A cut becomes more likely in September, with futures markets pricing in 60% odds of a cut and 35% odds of a continued pause.

The odds could shift if June’s CPI reading is lower than expected, Price says. He suggests inflation closer to 0.20% on a monthly basis could tip the scales for more dovish members of the Federal Open Market Committee and increase the odds of a September cut.

“For the first time in a long time, we could see some dissenting views” from officials who want to take a more accommodative stance, Price says.