US inflation accelerated to its highest level in more than three years in May, driven by a combination of rising energy costs and surging prices for technology hardware.
The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred gauge, rose 4.1% year-on-year, marking a significant uptick from the 3.8% reading recorded in April.
The broadening of price pressures reflects distinct drivers across the economy.
Energy costs continued to escalate, linked to ongoing geopolitical conflicts affecting global supply chains.
Simultaneously, the rapid expansion of artificial intelligence infrastructure has created intense demand for semiconductors and computer equipment, pushing prices higher in the technology sector.
These factors combined to create a persistent affordability challenge for consumers and businesses alike.
This development complicates the macroeconomic outlook for traders and investors.