US inflation accelerated to an annual rate of 4.2% in May, marking the third consecutive monthly increase and reaching the highest level in three years. The rise follows the escalation of tensions in the Middle East, with the conflict in Iran contributing significantly to the upward pressure on prices.

Data from the US Bureau of Labor Statistics showed that energy costs were a major driver of the inflation surge, accounting for 60% of the monthly increase in the consumer price index. Inflation had been gradually rising in recent months, with rates recorded at 3.3% in March and 3.8% in April, up from 2.4% in February before the Iran conflict began.

At a press conference, former President Donald Trump downplayed concerns about the inflation increase, describing the figures as “great” and stating that he “love[s] the inflation.” Trump highlighted continued strength in the stock market, which recently reached record highs. The White House echoed this sentiment in a statement, attributing the inflation uptick to “temporary disruptions” due to Iran’s interference in energy markets, while asserting that the broader economic agenda has continued to produce positive outcomes for Americans.

Despite these official reassurances, consumer confidence has weakened sharply. A survey from the Federal Reserve Bank of New York released Monday found that households have become more pessimistic regarding inflation, job prospects, and the risk of layoffs. Similarly, data from the University of Michigan indicated that consumer sentiment has fallen to historic lows, declining for the third straight month.

The recent inflation figures come at a pivotal time for the Federal Reserve, which is scheduled to meet next week under its new chair, Kevin Warsh. The central bank has held interest rates steady since late last year, maintaining a target range of 3.5% to 3.75%. Warsh, who has expressed views aligning with Trump, has suggested that rates could be lowered, arguing that current levels may be too high.

President Trump has continued to push for rate cuts despite rising prices. On Tuesday, he told reporters that he did not consider US fuel prices to be “very high, relatively speaking.” Traditionally, the Fed lowers rates to stimulate job growth, even if it risks spurring inflation. However, recent job market data shows resilience; employers added 172,000 jobs in May, while the unemployment rate remained steady at 4.3%.