Inflation rose to 4.2 percent year-over-year in May, the highest level since April 2023, according to the Bureau of Labor Statistics consumer price index report. Energy shocks from the Iran War accounted for 60 percent of the price increases.

Energy prices continued to soar, rising by 3.9 percent, following a 3.8 increase in April and 10.9 increase in March.

Exempting volatile items like food and energy, inflation rose 2.9 percent, still above the Federal Reserve’s 2 percent target. This report marks the third consecutive increase in consumer price inflation, which had stabilized in the months before the war in Iran began. 

The Federal Reserve group responsible for monetary policy is scheduled to meet on June 16-17, as financial markets predict that the central bank will have to raise interest rates by the end of the year.