American consumers felt better about the economy in May as tariff and stock market volatility took a breather, according to a new survey from the Federal Reserve Bank of New York released Monday.

Importantly, Americans’ perceptions about future inflation improved. This is good news for Fed officials, who see controlling price expectations as a key way to manage inflation itself, especially over the longer term.

U.S.-China trade talks are in the spotlight, with a second day of negotiations in London aimed at patching up a fraying truce between the world's two biggest economies.

Export controls are at the top of the agenda. Kevin Hassett, director of the National Economic Council, said Monday that the talks were likely to result in Beijing quickly releasing rare earths for export, and Washington easing China's access to semiconductors.

Consumers expect lower inflation over the next year than they did a month ago, the New York Federal Reserve found in its latest survey.

Over the next 12 months, consumers expect prices to rise 3.2%, down by 0.4 percentage point from a month ago, according to the May edition of the New York Fed's survey of consumer expectations.

The decline came after the Trump administration walked back some of the steep tariffs it enacted in early April. It also coincided with further cooling in the consumer-price index for the year through April to 2.3%.

U.S. wholesalers' inventories rose in April, showing signs of slowing amid President Trump's announcement of a sweeping package of tariffs at the beginning of the month. Inventories at merchant wholesalers rose 0.2% over the month, losing pace from a 0.3% increase in March, according to figures published Monday by the Commerce Department. Economists polled by The Wall Street Journal had expected inventories to be flat compared with a month earlier. (Dow Jones Newswires)

As markets tanked in the wake of President Trump’s “Liberation Day” tariffs in early April, members of Congress and their families made hundreds of stock trades, shining a spotlight on a controversial practice that some lawmakers have pushed to ban.

From April 2, when Trump launched sweeping tariffs to April 8, the day before he paused many of them, more than a dozen House lawmakers and their family members made more than 700 stock trades, according to a Wall Street Journal analysis of disclosure filings.

6 a.m.: NFIB Index of Small Business Optimism
9 a.m.: Johnson Redbook Retail Sales Index
10 a.m.: Quarterly Financial Report, Industry
10 a.m.: Quarterly Financial Report, Retail
11:30 a.m.: Economic Club of New York event with U.S. Trade Representative Jamieson Greer

7 a.m.: MBA Weekly Mortgage Applications Survey
8:30 a.m.: Consumer Price Index
8:30 a.m.: Real Earnings Summary
1 p.m: U.S. Securities and Exchange Commission Open Meeting

The dollar is likely to stay steady within recent ranges against other major currencies for now, Societe Generale’s Kit Juckes says in a note. Friday’s better-than-forecast U.S. jobs data helped lift the U.S. currency. It remains vulnerable to falls if investors cut exposure to U.S. assets due to uncertainty over U.S. trade and budget policies, the currency analyst says. However, clearer signs that tariffs are hurting U.S. growth could be required before there is another bout of dollar weakness. Eventually, uncertainty about U.S. policy “will gnaw away at confidence in the dollar and it will fall further,” Juckes says. — Jessica Fleetham

Data showing a rise in the U.K. unemployment rate and slowing wage-growth heighten expectations that the Bank of England will cut interest rates. Data showed the U.K. unemployment rate rose to 4.6% in the three months to April, the highest since May-July 2021. Money markets now fully price in a rate cut in September, having recently only fully priced that outcome for November, LSEG data show. Markets also price in almost two full 25 basis-point rate reductions this year. Investec economist Philip Shaw says a rate cut next week still looks unlikely. However, Tuesday's data reinforce Investec's view that the BOE will cut rates in August and November. —Jessica Fleetham

• Flare-ups continued across Los Angeles overnight following a day of mostly peaceful demonstrations over immigration enforcement that saw the Trump administration take the rare step of deploying active-duty Marines to the area.
• Container shipping activity to the U.S. from China crept up in early June, sparking hope that a second wave of inventory frontloading could be afoot ahead of the crucial summer transport season. (MarketWatch)
• Advocates for higher education are worried that the Trump administration’s immigration policies, and the resulting chaotic pushback, could lead to a decline in the number of international students coming to study at U.S. colleges and universities this fall. (Barron's)
• The tech industry is fighting to save clean-energy subsidies in the tax-and-spending bill working its way through Congress, a sign that access to power is a priority for the biggest artificial-intelligence companies.
• Canada’s decision to ramp up military spending at a faster-than-expected pace marks a “significant event” for the country’s fiscal direction, Prime Minister Mark Carney said.
• The U.K.’s labor market cooled in the three months to April, offering reassurance to Bank of England policymakers despite the level still being well above that required to return inflation to target any time soon.
• Sales in U.K. stores slowed in May as consumers reduced their spending on nonessential items, the latest report from the British Retail Consortium and KPMG showed.
• Australian Treasurer Jim Chalmers on Tuesday elevated Jenny Wilkinson to Secretary of the Treasury, a post that brings with it a seat on the monetary policy board of the Reserve Bank of Australia, and is a critical post for public-policy making and shaping the federal budget. (Dow Jones Newswires)
• China said Tuesday that it would extend a yearlong probe into pork imports from the European Union, as Beijing seeks to bolster ties with the 27-member block amid heightened trade tensions with the U.S.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.