The economy has defied warnings of tariff-induced price hikes.

A fresh inflation report to be released on Wednesday will provide the latest test for President Donald Trump’s tariffs as some retailers and economists warn the policy will raise prices.

So far, the economy has defied fears of price hikes, instead giving way to a cooldown of inflation over the months since Trump took office.

Economists expect inflation to have jumped slightly in May, registering year-over-year price increases of 2.4%. That would mark an increase from an inflation rate of 2.3% over the year ending in April, which amounted to the lowest inflation level since 2021.

The small increase in inflation anticipated by economists would keep price levels near the Federal Reserve’s target rate of 2%, putting them well below a recent peak of 9% in 2022.

In recent weeks, Trump has dialed back some of his steepest tariffs, easing the costs imposed upon importers. Such companies typically pass along a share of the higher tax burden in the form of price hikes.

A trade agreement between the U.S. and China in May slashed tit-for-tat tariffs between the world’s two largest economies and triggered a surge in the stock market. Within days, Wall Street firms softened their forecasts of a downturn.

The U.S.-China accord came weeks after the White House paused a large swath of Trump’s “Liberation Day” tariffs targeting dozens of countries. Trump also eased sector-specific tariffs targeting autos and rolled back duties on some goods from Mexico and Canada.

Still, an across-the-board 10% tariff applies to nearly all imports, except for semiconductors, pharmaceuticals and some other items. Those tariffs stand in legal limbo, however, after a pair of federal court rulings late last month.

Tariffs remain in place for steel, aluminum and autos, as well as some goods from Canada and Mexico.