Inflation hit a fresh 40-year high in May in a broad advance, raising prospects that Federal Reserve will keep hiking interest rates aggressively for longer.
The consumer price index increased 8.6% from a year earlier, Labor Department data showed Friday. The widely followed inflation gauge rose 1% from a month earlier, topping all estimates. Shelter, food and gas were the largest contributors.
Read More: Inflation is Going to Get Worse. Blame a Lack of Diesel
The so-called core CPI, which strips out the more volatile food and energy components, rose 0.6% from the prior month and 6% from a year ago, also above forecasts.
The figures reinforce that inflation is still heated by many measures, and that the Fed — which has committed to half-point hikes at each of its next two meetings, starting next week — will have to maintain that aggressive stance through its September gathering. Record gasoline prices and geopolitical factors threaten to keep inflation high in the coming months, suggesting the Fed will have to pump the brakes on the economy for longer.
Treasury yields jumped, stock futures fell and the dollar rose after the report.
—With assistance from Sydney Maki, Reade Pickert, Augusta Saraiva, Chris Middleton and Sophie Caronello.
- Alison Roman Won't Sugarcoat It
- If Donald Trump Is Indicted, Here's What Would Happen Next in the Process
- The World's Greatest Places of 2023
- Exclusive: Effective Altruist Leaders Were Repeatedly Warned About Sam Bankman-Fried Years Before FTX Collapsed
- Who Should Be on the 2023 TIME100? Vote Now
- Postmaster General Louis DeJoy's Surprising Second Act
- Gaslighting, Narcissist, and More Psychology Terms You're Misusing
- In This Texas County, There's No Such Thing as Moving on From COVID-19
- In Defense of Nora Ephron's Unfairly Panned Heartburn Movie
- Want Today's Top Headlines in Your Inbox? Sign Up for The Brief
