U.S. PCE inflation measure tops 4% in May; consumer spending strong

U.S. inflation rose above 4% in May for the first time in three years, driven in part by higher energy prices linked to the Middle East conflict. The hotter print increases pressure on the Federal Reserve and raises the odds of additional interest-rate hikes later this year. The data is broadly negative for duration-sensitive assets and risk markets.

Analysis

U.S. inflation rose above 4% in May for the first time in three years, driven in part by higher energy prices linked to the Middle East conflict. The hotter print increases pressure on the Federal Reserve and raises the odds of additional interest-rate hikes later this year. The data is broadly negative for duration-sensitive assets and risk markets.