US May CPI Rises to 4.2%, Highest Since April 2023
US headline CPI inflation accelerated to 4.2% in May, the highest since April 2023, while core CPI hit 2.9%, the highest since September 2025. Inflation now stands at more than double the Federal Reserve's 2% target, fueling speculation of potential rate hikes.
The US Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose to 4.2% year-over-year in May, marking the highest reading since April 2023. Core CPI, which excludes food and energy, also climbed to 2.9%, its highest level since September 2025.
This latest data indicates that inflation remains stubbornly above the Federal Reserve's 2% target, with the headline figure now more than double that goal. Consequently, market expectations for Fed rate hikes are increasing, as policymakers may need to tighten monetary policy further to curb price pressures.
The report comes amid ongoing debates about the path of inflation and the appropriate monetary stance. No official Fed response has been issued at the time of this note.
Source: The Kobeissi Letter