US consumer spending unexpectedly fell in May, and moderate inflation is unlikely to change the Federal Reserve's expectation of a rate cut in July.

[Coin World] U.S. consumer spending unexpectedly fell in May as the boost from pre-tariff purchases waned, with inflation remaining moderate. Data released on Friday showed that consumer spending, which accounts for more than two-thirds of economic activity, declined by 0.1% last month, while the market had expected a rise of 0.1%. After the surge in advance shopping disappeared, consumer spending nearly stagnated last quarter. Service spending also decreased, leading to a quarterly increase in consumption spending of only 0.5%, the lowest since the second quarter of 2020. This data suggests a weak consumption growth path for the second quarter. The combination of weak consumption and moderate inflation is still not enough to prompt the Federal Reserve to restart interest rate cuts in July. Economists point out that the current moderate inflation stems from companies still stockpiling inventory before the tariff took effect, and inflation is expected to pick up starting from the June CPI data. Federal Reserve officials indicated that core commodity prices in the U.S. rose by 0.24% in May, with significant increases occurring every month this year except for the drop in March. The housing zone rose by 0.26%, marking the largest moderate increase since November. Core service prices (excluding housing) increased by 0.13%, marking the third consecutive moderate reading.