There was good news on the U.S. inflation front in May as both the headline and core rates of the Consumer Price Index rose less than forecast.

The CPI rose 0.1% in May, according to the Bureau of Labor Statistics. Economist forecasts had been for 0.2% and April's pace was 0.2%.

On a year-over-year basis, the CPI climbed 2.4% against estimates for 2.5% and April's 2.3%

Core CPI, which strips out the volatile food and energy categories, rose 0.1% last month versus forecasts for 0.3% and 0.2% in April. Year-over-year core CPI was 2.8% versus an expected 2.9% and 2.8% in April.

Markets hold to rate-cut outlook

Despite continued uncertainty around inflation’s trajectory, the market remains confident that the Federal Reserve will begin easing policy later this year. According to the CME FedWatch Tool, traders are fully pricing in two rate cuts, with the first expected in September and the second in December. For the moment, this morning's fresh data hasn't changed that calculus.

A check of traditional markets finds U.S. stock index futures reversing earlier declines and now in the green by about 0.4% across the board. The 10-year Treasury yield is lower by five basis points to 4.45%.