President Donald Trump has suffered a fresh economic blow after new data showed inflation surged to its highest level in more than three years.
As the shock to global energy supplies from the Iran war continued to push prices higher, new figures show that the Consumer Price Index rose 4.2 percent in May compared to a year earlier.
The figure is the third consecutive monthly acceleration and represents the fastest annual pace of inflation since April 2023.
With only months until the midterm elections, the data is damning for the GOP, given Trump returned to office promising to quickly bring down costs for American consumers.
Instead, households are facing renewed pressure from higher prices, while businesses continue to grapple with uncertainty stemming from geopolitical tensions.
Those tensions are unlikely to ease in the short term, after the president issued a new threat on Wednesday to escalate the war with Iran.
“Iran’s Military is a complete and total mess. Much of it, like their Navy and Air Force, doesn’t even exist anymore-They have been completely defeated. Iran is all talk and no action. The Bully of the Middle East is DEAD!!!” Trump posted at 7:03 a.m. ET on Wednesday.
“They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!!”
The latest figures are also likely to complicate the Federal Reserve’s plans for interest rates, despite Trump’s handpicked chairman Kevin Warsh now leading the central bank.
Federal officials have repeatedly signaled that they need greater confidence inflation is moving sustainably toward their 2 percent target before cutting rates.
But Wednesday’s data makes that outcome increasingly unlikely in the near term.
The Labor Department’s inflation data showed prices climbed 0.5 percent during May alone, a sharp increase that economists largely attributed to rising energy costs tied to the ongoing conflict in the Middle East.
Inflation had been running at 2.4 percent annually before Trump’s intervention in February, but months of instability and fears over global oil supplies have pushed prices steadily higher.
Higher energy prices again accounted for much of the monthly gain, thanks largely to the standoff in the Strait of Hormuz, which accounts for about 20 per cent of the world’s oil.
Core inflation, which excludes food and energy, was 2.9 per cent -- the highest since September.
Despite this, Trump continues to talk up his economic credentials and has vowed that gas prices will plummet once the war is over.
“We’re the strongest, we’re the hottest, and we’re the most respected country anywhere in the world,” he told struggling farmers in Wisconsin on Friday before immediately veering into a wild rant about the Lincoln Memorial Reflecting Pool in Washington, DC.
He also once again claimed cost-of-living pressures were part of a hoax made up by Democrats.
“I inherited all these high prices. They came in and they said, ‘affordability’. They made up the word, because that’s the only thing they’re good at,” Trump said.
