Did US Inflation Peak in May? | Presented by CME Group
Summary
US headline inflation may have peaked in May as energy prices fell after the partial reopening of the Strait of Hormuz, but renewed US-Iran tensions could revive inflation and increase the odds of Fed rate hikes.
- Oil and gasoline prices declined in June/early July after the partial reopening of the Strait of Hormuz.
- June’s CPI drop was the largest one-month decline since April 2020.
- The June CPI figure does not capture a subsequent rise in energy prices tied to renewed US-Iran tensions.
- A serious re-escalation of the US-Iran conflict could revive upside inflation risk and raise the probability of rate hikes.
