The Federal Reserve held its rates Wednesday's meeting as expected. The agency noted that while “Recent indicators suggest that economic activity has continued to expand at a solid pace,” “the overall economic outlook is uncertain and the Committee remains very mindful of inflation risks.”

The Fed waits a rate cut before the end of the year and further cuts in 2025 to reach 3.1% by the end of 2026.

“In recent months, there has been modest further progress towards the Committee's 2 percent inflation target.” statement notes.

Earlier on Wednesday, the US Bureau of Labor Statistics (BLS) released its monthly Consumer Price Index (CPI). REPORTtracking changes in the prices Americans must pay for essential goods and services, such as housing, food, and energy.

The CPI measures purchasing power, or how far the dollar goes now compared to a year or a month ago.

It's with widely used measuring inflation; The Federal Reserve Board, the President, and Congress use the CPI as an economic indicator to help set policies. ^{Jerome Powell, chairman of the US Federal Reserve. Photo: Al Drago/Bloomberg via Getty Images}

Here are three things you should know about the CPI report:

1. Prices rose 3.3% in May from a year ago, but were flat month-on-month.

This is good news: inflation has slowed for the second month in a row.

Overall prices were also unchanged after rising 0.3% in April.

Connected: CPI report: Rising rent, gas prices keep inflation high

When food and energy prices are removed from the equation, prices rose 0.2% in the month and 3.4% from last year, which is still lower ones than analyst estimates.

2. Rent increase was “the biggest factor”.

Rental prices and owner-occupier equivalent rent rose 0.4% from April to May across the country, offsetting a 3.6% drop in gas prices. This marks the fourth month in a row that shelter prices have risen this much.

Rent was the “biggest factor” in headline inflation outside of food and energy and rose 5.4% from a year earlier.

3. Rent was not the only factor.

Categories other than shelters have increased significantly in price over the past year.

Car insurance, for example, increased by 20.3% while medical care increased by 3.1%.

Month-on-month, used car and truck prices rose 0.6%, after falling 1.4% in April.

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