High gas prices are just the start — inflation is seeping into the rest of the economy
Inflation in the U.S. is on the rise, with gasoline prices exceeding $4 per gallon due to geopolitical tensions. Recent data indicates a year-over-year inflation increase of 3.8%, the highest since 2021, affecting various sectors beyond just energy. The Federal Reserve is closely monitoring these trends as they could signal a prolonged economic challenge.
- ▪Gasoline prices have surpassed $4 per gallon amid ongoing conflicts in the Middle East.
- ▪The year-over-year inflation rate has risen to 3.8%, the fastest pace since 2021.
- ▪Core PCE, which excludes food and energy, is also showing signs of rising inflation pressures.
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Americans don’t need a press release to know that inflation is rising. Gasoline is above $4 per gallon amid the ongoing conflict in the Middle East and closure of the Strait of Hormuz, and the release of key price data on May 28, 2026, underscores why policymakers are worried these pressures could spread into the broader economy.Recommended Video The report offered a mixed but still uncomfortable picture. The month-to-month rise was softer than expected, but the change year over year still points to concern: a 3.8% jump from a year earlier, the fastest pace since 2021, and a less volatile index that excludes food and energy up 3.3%. This increase suggests inflation isn’t limited to gasoline.
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