Inflation Accelerated in May as Iran War Pushed Up Prices

June 25, 2026
Business

The pickup in prices poses a challenge for the Fed and its new chairman, Kevin M. Warsh, who is under pressure from President Trump to lower interest rates. At their meeting this month, about half of Fed officials indicated that they instead expected to raise rates by the end of the year, and investors have become increasingly convinced the central bank will have to move to rein in inflation.

“This is not a comfortable report for Fed officials,” Omair Sharif, founder of Inflation Insights, a forecasting firm, wrote in a note to clients on Thursday.

At the same time, the data released Thursday showed that consumers remained resilient in the face of high prices. Consumer spending rose 0.7 percent in May, easily outpacing the increase in prices. Personal income also rose 0.7 percent, suggesting the strong labor market is helping households keep up with higher prices.

Article source: https://www.nytimes.com/2026/06/25/business/inflation-iran-war-prices.html