US consumer inflation hits fresh three-year high in May

United States consumer inflation surged to its highest level in three years in May, official data revealed Wednesday, as escalating energy prices significantly impacted the world's largest economy. The consumer price index (CPI) climbed 4.2 percent year-on-year, an increase from April's 3.8 percent, marking the highest reading since April 2023, according to the US Bureau of Labor Statistics. This surge is largely attributed to a 23.5 percent rise in energy prices over the past year, with gasoline costs alone jumping 40.5 percent. The conflict involving Iran and its impact on global oil supply, particularly the disruption of the Strait of Hormuz, has been cited as a contributing factor to the soaring energy costs. While President Donald Trump expressed confidence that the price shock would be temporary and a peace deal imminent, the persistent high costs present a significant challenge for voters as they approach the November midterm elections. Trump's Republican Party faces a critical test in maintaining control of Congress amidst voter concerns over inflation. Beyond energy, grocery prices also saw a notable increase, rising 2.7 percent year-on-year. Core CPI inflation, excluding volatile food and energy components, edged up to 2.9 percent in May. The Federal Reserve, which targets a long-term inflation rate of 2 percent, is expected to keep interest rates steady at its upcoming meeting, though markets are anticipating potential rate hikes later in the year, causing unease among equity investors.

“

The price shock will be temporary and that a peace deal will be signed soon