The US inflation rate slowed in May with some suggesting this is enough for the Federal Reserve to pause its series of interest rate hikes. Both the consumer price index (CPI) and the core CPI (excluding food and energy) decelerated on an annual basis. The year-over-year inflation rate is now at its lowest level since March 2021, standing at 4%. However, the core CPI, a key gauge of prices closely monitored by the Fed, continued to rise at a concerning pace. The overall CPI increased by a smaller 0.1%, aided by lower gasoline prices. The upcoming CPI report in July will play a crucial role in determining the Fed's actions. While economists expect the central bank to keep rates unchanged in June, policymakers remain open to future tightening. The S&P 500 rose, and US Treasuries fluctuated as traders contemplated the Fed's decision.