Inflation Hits a 3-Year High

Inflation isn't cooling off just yet. The Labor Department said consumer prices were 4.2% higher in May than a year earlier, up from April's 3.8% pace and the fastest annual increase since April 2023; it's the first time it's been above 4% in three years. The jump, driven largely by costlier energy tied to the conflict with Iran and shipping disruptions near the Strait of Hormuz, matched economists' expectations, reports CNBC.

The AP reports that on a monthly basis, prices were up 0.5% in May, down from bigger jumps of 0.6% in April and 0.9% in March. "Core" inflation, which strips out food and energy prices, rose 2.9% from a year ago, slightly above April's 2.8%. On a monthly basis, core prices were up a modest 0.2%. The data lands a week before the Federal Reserve's first meeting under new Chairman Kevin Warsh, and traders are now betting the central bank may hike rates by year's end instead of cutting them, reports the Wall Street Journal.