SAN FRANCISCO (S&P Global Ratings) May 12, 2025--We anticipate the Consumer Price Index (CPI) will increase by 2.3% year over year for April, while core inflation should remain stable at 2.8%. Household spending remains strong, but we expect retail sales to remain flat for April, following a 1.5% rise in March. The upcoming April CPI readings for inflation and retail sales will reflect tariff distortions. Consumer sentiment has been declining, given inflation and tariffs, even though the data shows consumers are still spending. The Federal Reserve kept its policy rate steady at last week's Federal Open Market Committee (FOMC) meeting, remaining in wait-and-see mode. Given rising inflationary pressure, we anticipate the Fed will keep the federal funds rate at 4.25%-4.50%
