WASHINGTON, D.C. — The Personal Consumption Expenditures Price Index rose 3.8% year-over-year as of May 28, 2026, the fastest annual increase since 2021. Core PCE, which excludes food and energy, rose 3.3% over the same period.

Gasoline prices in the U.S. were above $4 per gallon as of May 2026 amid ongoing conflict in the Middle East and the closure of the Strait of Hormuz. Energy prices rose 18% year-over-year in April 2026. Higher energy costs affect shipping, airline fares, food production, utilities, packaging, business profit margins, and consumer psychology.

Airline spending increased over 20% year-over-year in April 2026. Grocery prices posted their largest monthly gain since 2022 in April 2026. Housing, utilities, and recreational spending contributed to elevated underlying inflation as of May 2026. Tariff-sensitive categories such as apparel and household furnishings continued to rise in price as of April 2026.

Headline PCE rose to 3.5% year-over-year in March 2026, up from 2.8% in February 2026. The April 2026 Consumer Price Index showed a 3.8% year-over-year increase, the fastest in three years.

Kevin Warsh was sworn in as the new chair of the U.S. Federal Reserve on May 22, 2026, during a ceremony in the East Room of the White House. Warsh has recently downplayed the significance and accuracy of the PCE inflation gauge. President Donald Trump, who nominated Warsh, has pressured the Federal Reserve to cut interest rates.

The Federal Reserve held interest rates steady at a target range of 3.50% to 3.75% during its April 2026 policy meeting. Meeting notes indicated that officials viewed inflation as elevated, partly due to rising global energy prices. Many officials expressed concern that persistent inflation could necessitate additional rate hikes. The Fed’s next policy committee meeting is scheduled for June 16–17, 2026. Long-term yields on U.S. Treasury bonds reached their highest levels since 2007 as of May 2026.