Inflation was tame in May, defying fears that the impact of President Trump’s tariffs would start to show a rise in prices.

Wednesday’s inflation report won’t change much for the Federal Reserve because it will take several months of price data to convince officials that tariff-related risks to inflation won’t send up prices in a concerning fashion.

Investors have been encouraged in recent days by a slate of fresh data that has shown the economy is humming along. Just last week, the monthly jobs report showed that the U.S. added more jobs than expected, assuaging many investors who were worried about an imminent downturn because of tariffs.

Wall Street is also more confident about rate cuts this year, and Trump repeated his call that the Fed should slash interest rates. Interest-rate futures showed the chances of three or more 0.25 percentage-point cuts this year rising Tuesday, according to CME Group data.

The Federal Reserve is on track to hold interest rates steady at its meeting next week. Wednesday’s tame inflation report could potentially shape officials’ quarterly economic and rate projections that will be released after the meeting.

Still, for officials who have been hearing from businesses about likely cost increases, the report is more likely to simply shift attention to the next month or two of inflation data. By then, businesses might have more confidence that higher tariff rates are here to stay and inventories they acquired before tariff increases took effect are more likely to have been sold.

• Bonds Rally, Stocks Slip After Inflation Data
• Trump Renews Call for Bumper Fed Rate Cut

President Donald Trump appears ready to rewrite the playbook for appointing leaders at the Federal Reserve.

Presidents typically announce their nominees for Fed chair three to six months before the sitting person’s term expires, quietly navigating Senate confirmation hearings while minimizing market disruption. But Trump, who has loudly pressed current Fed Chair Jerome Powell to cut interest rates in the past few months, says he is close to naming a successor nearly a full year ahead of schedule. (Barron's)

Consumer prices rose 0.1% in May over the previous month, less than economists anticipated. Year-over-year inflation was 2.4%, in line with expectations and near a four-year low recorded in April.

The report will raise questions over when a widely anticipated bump in prices this summer, expected by the Federal Reserve and private-sector economists, will materialize—and whether it will be as stiff as some have warned.

• Dollar Weakens After Trump Revives Unilateral Tariff Threats

• These L.A. Business Owners Say Protest-Fueled Mayhem Is Hammering Their Sales
• How Home Depot Became Ground Zero in Trump’s Deportation Push

• China Puts Six-Month Limit on Its Ease of Rare-Earth Export Licenses

8:30 a.m.: Producer Price Index
8:30 a.m.: Unemployment Insurance Weekly Claims Report, Initial Claims
9:30 a.m.: IMF regular press briefing with Strategic Communications Director Julie Kozack
10 a.m.: Quarterly Services Report
12 p.m.: World Agricultural Supply & Demand Estimates
4:30 p.m.: Foreign Central Bank Holdings
4:30 p.m.: Federal Discount Window Borrowings

10 a.m.: University of Michigan Survey of Consumers, preliminary

Soft consumer price increases could push the Fed to focus on economic weakness and drop its hawkish stance, in a potential headwind for the dollar, Ballinger Group’s Kyle Chapman writes. Chapman says that “the message is clear that Trump 2.0 has been disinflationary so far.” He notes that, while tariffs could drive up goods prices, they also soften demand. “It is the net effect that will drive the Fed’s direction,” he writes. “More data like this would shift the focus towards buttressing a tariff-weakened economy, and at that point the dollar would come under some serious pressure.” — Paulo Trevisani

• U.S. debt auctions have seen good demand—great even, in some cases. Yet, concerns about buyers not showing up at the next bond buffet persist. Thursday’s auction might quieten the chatter. (Barron's)
• A growing share of financial advisers are outsourcing their investment management to third parties.
• The Environmental Protection Agency proposed Wednesday weakening air-pollution standards for mercury and eliminating carbon dioxide rules on power plants, reversing Biden-era policies as part of an overall effort to curtail the agency’s role in regulating climate change.
• The Saudi-led OPEC+ group will return more than two million barrels a day of oil to the market by the fall if the cartel continues to unwind production cuts at its current rate. It is a U-turn for the group that spent the last two years curbing supply to boost the oil price.
• Gold surpassed the euro as the second largest global reserve asset at market prices last year, the European Central Bank said.
• Oil prices eased but remained elevated on Thursday as investors weighed up the U.S.-China trade deal, rising geopolitical tensions in the Middle East, and the start of the summer driving season. (Barron's)
• Half of all people on earth experience severe water scarcity at least one month out of the year, according to the UN. A radical new kind of desalination technology is finally on the cusp of helping to slake the world’s thirst.

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.