A hot inflation reading for May released Wednesday morning reinforces that the Federal Reserve will maintain interest rates next week. Rates will likely remain on hold until there's evidence that inflation is receding.
The Consumer Price Index rose 4.2% in May, in line with expectations, compared with 3.8% in April. The increase was again driven by energy prices due to the conflict in the Middle East, which accounted for 60% of the rise in inflation. Food and shelter prices also pushed up inflation last month.
Stripping out volatile energy and food prices, "core" inflation ticked up to 2.9% from 2.8% in April, also in line with expectations. Month over month, core inflation rose 0.2%, below expectations for a rise of 0.3% and down from 0.4% in April.
Officials are closely watching whether higher energy prices are becoming embedded in core inflation. So far, core prices have not jumped at the same level as energy prices. Still, core inflation ticked up and is roughly a full percentage point above the Fed's 2% inflation goal.
Read more: How to protect your savings against inflation
The Consumer Price Index rose 4.2% in May, in line with expectations, compared with 3.8% in April. The increase was again driven by energy prices due to the conflict in the Middle East, which accounted for 60% of the rise in inflation. Food and shelter prices also pushed up inflation last month.
Stripping out volatile energy and food prices, "core" inflation ticked up to 2.9% from 2.8% in April, also in line with expectations. Month over month, core inflation rose 0.2%, below expectations for a rise of 0.3% and down from 0.4% in April.
Officials are closely watching whether higher energy prices are becoming embedded in core inflation. So far, core prices have not jumped at the same level as energy prices. Still, core inflation ticked up and is roughly a full percentage point above the Fed's 2% inflation goal.
Read more: How to protect your savings against inflation
5 days ago
