BLS data show US headline CPI rose 4.2% YoY in May, the largest increase since
early 2023, driven by higher energy prices linked to the Iran-related conflict.
Core CPI (ex food and energy) rose 0.2% MoM (market est. 0.3%) and 2.9% YoY. The
report shows offsets in items including transportation services, health
insurance and new-vehicle prices. Economists warn headline pressures could
persist and further upside in consumer prices would keep rate-hike options on
the Fed’s table. Even if the conflict eases quickly, oil supply normalization
may lag, sustaining cost pressures; fertilizer market disruptions risk lifting
grocery prices over time and higher transport costs would push up consumer goods
inflation.
