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Key inflation gauge jumps to 3-year high in latest sign of affordability challenges

The Federal Reserve's preferred inflation measure topped 4.0% in May. This surge coincides with strong consumer spending and peaking gas prices. The trend is creating pressure on policymakers regarding interest rate decisions.

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What changed

The primary inflation gauge reached its highest level in three years.

Live updates

  1. US Inflation Gauge Hits Three-Year High in May

    The Federal Reserve's preferred inflation measure topped 4.0% in May. This surge coincides with strong consumer spending and peaking gas prices. The trend is creating pressure on policymakers regarding interest rate decisions.

    What's confirmed:

    • The US PCE inflation measure topped 4.0% in May.
    • The core inflation rate hit 3.4% in May, the highest level since October 2023.
    • Consumer spending remained strong despite rising costs.
    • The core personal consumption expenditures price index climbed 0.3% for the month of May.

    Still unconfirmed:

    • Economists see the Federal Reserve remaining on hold despite lifting core inflation forecasts.
    confidence 90%