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.

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 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.

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

Discover May's inflation trends with insights from the Bureau of Labor Statistics. Click for my full review of the CPI data and a look at what it means for markets.

The Labor Department has cut back on the inflation data it collects because of the Trump administration’s government hiring freeze, raising concerns among economists about the quality of the inflation figures just as they are being closely watched for the impact of tariffs.

A cooler-than-expected inflation reading from May is not likely to shake the view of most Federal Reserve policymakers that rates should stay on hold until there is more clarity about the impact from President Trump's tariffs.

Inflation dodged the tariff bullet again. The May Consumer Price Index rose +0.1% M/, less than the +0.2% consensus and the 0.2% increase in April.

Speaking at Forbes Iconoclast Summit, BlackRock’s CEO Larry Fink said he expected higher inflation if the tariffs are implemented in the coming months.