Iran War Lifts a Second Inflation Reading to Highest Level Since 2023

A measure of inflation closely watched by the Federal Reserve accelerated in April to a three-year high, reinforcing the central bank’s budding support to consider raising interest rates if price pressures do not ease.

The Personal Consumption Expenditures index rose 3.8 percent from the same time last year. It was the fastest annual pace since May 2023, when the Fed was in the midst of raising rates to tame a burst of inflation that had emerged in the wake of the pandemic.

A measure of underlying inflation that strips out volatile food and energy prices also notched a multiyear high. That measure, “core” inflation, increased at an annual pace of 3.3 percent, the fastest since November 2023.

On a monthly basis, inflation rose slightly less than expected. Overall prices jumped 0.4 percent and those excluding food and energy prices ticked up 0.2 percent.

Article source: https://www.nytimes.com/2026/05/28/business/inflation-pce-gauge.html