Inflation is finally looking up. US consumer prices rose 0.4% in May — the biggest one-month jump since February 2013 and twice what economists expected. This rise could have implications for the Fed’s two-day policy meeting this week, though Reuters reports the expectation remains the same: the taper will continue, but an interest rate hike is still months off.
Reuters has more context about the CPI report:
May’s rise in consumer prices built on a 0.3 percent advance in April. With tensions escalating in Iraq, a major world oil producer, inflation is likely to push higher in the coming months.
In the 12 months through May, consumer prices increased 2.1 percent, the biggest gain since October 2012. That followed a 2.0 percent rise in the period through April, marking the first back-to-back months in which the year-on-year CPI had risen at least 2 percent since early 2012.
Stripping out food and energy prices, the so-called core CPI rose 0.3 percent, the largest increase since August 2011.