US inflation hits 3-year high amid Iran war energy shock

US consumer inflation surged to a three-year high in May, with the consumer price index (CPI) rising 4.2% year-on-year, up from 3.8% in April, according to the US Bureau of Labour Statistics. This is the highest reading since April 2023 and aligns with analyst expectations. The spike is attributed to increased energy prices following the US-Israel war against Iran, launched in late February, which led Tehran to virtually close the Strait of Hormuz, a chokepoint for roughly a fifth of global oil and gas. President Donald Trump has claimed the price shock is temporary and that a peace deal is imminent. However, soaring costs are a major issue for voters ahead of the November midterm elections, where Trump's Republican Party aims to maintain control of both houses of Congress.