US May CPI 4.25% YoY vs 4.30% forecast, core softer

US headline CPI rose 4.25% year-on-year in May, slightly below the 4.30% forecast. Core CPI came in at 0.21% month-on-month, softer than expected, with the three-month annualized core pace steady at 3.17%. The mixed inflation data suggests headline inflation remains elevated but core shows no broad second-round effects. This gives the Fed room to stay on hold, potentially weighing on USD as rate hike expectations may ease further.