US inflation climbs to 4.2% in May as energy prices spiral higher

The Consumer Price Index rose 4.2% year-over-year in May 2026, up from 3.8% in April, marking the fastest pace of inflation the US has seen since April 2023. The culprit is not subtle: energy costs are ripping higher, and the ripple effects are hitting everything from consumer wallets to crypto portfolios.

Monthly CPI climbed 0.5%. The Federal Reserve’s preferred path back to 2% inflation just got a lot longer and a lot steeper.

Energy is doing the heavy lifting

Energy prices surged 23.5% year-over-year in May. Gasoline alone jumped 40.5%, and fuel oil skyrocketed 58.9%. The driving force behind these numbers is the ongoing Iran conflict, which has created persistent supply disruptions in global energy markets.

Core CPI, which strips out volatile food and energy prices, rose to 2.9% year-over-year. That’s the highest core reading since September 2025.