Inflation rises to 4.2 percent in May, Gregory Daco notes

Inflation rises to 4.2 percent in May, Gregory Daco notes
U.S. CPI hits 4.2 percent in May

Gregory Daco reports that U.S. headline CPI inflation rose to 4.2 percent in May, marking the highest level since April 2023.

Core CPI inflation remained flat at 2.9 percent, up slightly from its recent low, and at its highest level since September 2025. Daco notes that the main drivers of the increase were limited to a few categories, mainly airfare, with minimal passthrough to other segments.

Earlier this year, Gregory Daco reported that 36% of households expect their financial situation to worsen by May 2026, up from 29.4% in January 2026, according to survey data referenced in recent coverage. Kevin Warsh is also set to revamp Federal Reserve communication and may reverse forward guidance on rates this June, as noted by Daco in a separate article. These developments follow closely as inflation and monetary policy expectations remain in focus.

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