Cities Where Inflation Is Plummeting Now

Minneapolis and Honolulu became the first major U.S. cities to see inflation fall back in line with the Federal Reserve’s national target since the pandemic price surge began in 2021.

Prices in Minneapolis rose just 1.8% in the 12 months through May, while in urban Hawaii the figure was 2%, according to the Bureau of Labor Statistics.

Both regions saw big drop-offs in the cost of household energy and motor fuel.

The Fed’s inflation target is 2%, though it uses a different price gauge that’s not directly comparable to the BLS numbers.

Still, the data published Tuesday show a cooling of inflation across the U.S. The nationwide annual rate eased to 4%, the lowest level since March 2021.

Investors stepped up bets that Fed officials, who’ve been raising interest rates for more than a year to rein in prices, will pause their run of hikes when they meet this week.

Some of the biggest U.S. cities have seen sharp price slowdowns. In New York City, the largest metro area, the inflation rate dropped to 3.5%, down from a post pandemic peak of 6.7% in June 2022.