Today’s CPI numbers for May came in hotter than expected. Headline inflation rose to 4.2% (from 3.8% in April), while core inflation (excluding food and energy) ticked up to 2.9%.

The main culprit? Surging energy prices — especially gasoline — following the recent geopolitical tensions in the Middle East. Once again, it’s the old story: geopolitics hits the pump, and we all feel it in the wallet.

For the Federal Reserve this is awkward. They were hoping inflation was safely on its way down toward the 2% target. These numbers make that path a lot bumpier. The probability of rate cuts in the near term just took a hit, and the market didn’t like it — both NYSE and Nasdaq are red today.

It feels like we’re stuck in this strange loop. Every time the market starts to calm down and hope for lower rates, something happens that pushes inflation back up. Energy, tariffs, geopolitics — pick your poison.

The inflation dragon isn’t slain yet. It just took a little nap — and now it’s stretching again.

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This is a new post on the new dewlar.me blog.
You can find the old blog here:https://mrsdewlar.blogspot.com

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