May CPI Inflation Hits Three-Year High of 4.2% Amid Iran War Energy Shock

Above 4.5% plunges to 39%20%

The Bureau of Labor Statistics reported that the annualized CPI inflation rate for May 2026 rose to 4.2%, driven by a spike in energy prices from the ongoing conflict in Iran.

April CPI Inflation Climbs to 3.8% Driven by Surging Energy Costs

Above 4.5% jumps to 58%8%

The April CPI report showed headline inflation rising to 3.8% year-over-year, the highest reading since May 2023, driven by sharply higher energy prices linked to the Middle East conflict.

Wendy’s launches $4 Biggie Deals menu amid rising food prices

Above 4% surges to 97%23%

Wendy’s introduced a new value menu to attract cost-conscious consumers facing rising grocery and food prices, reflecting ongoing inflationary pressures and influencing market expectations for inflation above 4%.

Fast food chains launch value menus amid high food prices

Above 4% surges to 73%32%

Major fast food chains like Wendy's, Taco Bell, and McDonald's introduced new value menus in May 2026 to attract cost-conscious consumers facing 4.1% higher dining costs. This consumer response to persistent food price inflation supported market expectations for inflation above 4% but limited expectations for very high inflation.

PepsiCo announces price cuts amid weakening demand due to inflation

Above 5% jumps to 35%7%

PepsiCo cut prices on popular snack products to regain customers frustrated by years of price hikes, signaling consumer sensitivity to inflation and impacting market inflation expectations, particularly for higher inflation outcomes.

PepsiCo cuts prices on snacks to regain customers amid inflation pressures

Above 4.5% surges to 75%34%

PepsiCo announced price cuts on popular snack brands to address weakened demand caused by years of price hikes. This move reflects consumer sensitivity to inflation and may influence inflation expectations, particularly for outcomes above 4.5% and 5%.

Australia’s central bank raises interest rate to 3.85% amid surging inflation

Above 4% jumps to 49%8%

The Reserve Bank of Australia increased its benchmark interest rate after inflation rose to 3.8% for the 12 months through December, signaling persistent inflation pressures. This global inflationary environment influenced market expectations for U.S. inflation outcomes above 4% and 5%.

Amazon imposes 3.5% fuel surcharge amid Iran war-driven fuel price rise

Above 4% jumps to 54%13%

Amazon announced a 3.5% fuel and logistics surcharge on third-party sellers starting mid-April 2026 due to elevated fuel costs from the ongoing Iran war. Rising fuel and logistics costs contributed to inflationary pressures, influencing market expectations for inflation above 4% and 5%.

U.S. wholesale prices surge as Iran war escalates energy costs

Above 4% jumps to 48%7%

In April 2026, wholesale prices surged 4% year-over-year, driven by an 8.5% increase in energy prices due to the Iran war. This surge heightened inflation concerns and influenced market pricing for inflation above 4%.

April 2026 CPI rises 0.6%, inflation remains elevated but stable

Above 5% dips to 14%4%

The BLS released April 2026 CPI data showing a 0.6% increase seasonally adjusted, indicating inflation remains elevated but stable. This data contributed to a gradual decline in market probabilities for inflation above higher thresholds as inflation did not accelerate further.

S&P 500 plunges nearly 5% amid trade war fears and inflation concerns

Above 6% plunges to 10%37%

Stock market declines driven by fears of escalating trade tensions and persistent inflation pressures reflected investor worries about economic growth and inflation control. This contributed to a decline in market confidence for inflation outcomes above 6%, 8%, and 10%.

Hiring slowdown in December challenges Federal Reserve's inflation control efforts

Above 5% jumps to 24%6%

Data showed sluggish hiring and a slight uptick in unemployment, complicating the Fed's dual mandate to control inflation and maximize employment. This increased uncertainty about future interest rate moves, affecting inflation expectations and market pricing for outcomes above 5% and 6%.

US wholesale prices surge 4% amid Iran war driving energy costs higher

Above 4% surges to 32%17%

The Labor Department reported a 4% year-over-year increase in the producer price index in March, the largest in over three years, driven by an 8.5% surge in energy prices due to the Iran war. This heightened inflation concerns and influenced market prices, especially for inflation above 4% and 5%.

Hiring slowed in December despite Fed rate cuts

Above 5% jumps to 17%8%

December 2025 jobs data showed a slowdown in hiring with only 50,000 jobs added, defying Federal Reserve efforts to boost the labor market through interest rate cuts. Sluggish hiring and low wage growth tempered inflation expectations, causing fluctuations in market prices for higher inflation thresholds.

March 2026 CPI rises 0.9%, higher monthly increase but inflation still moderate

Above 6% jumps to 12%5%

The BLS reported a 0.9% seasonally adjusted increase in CPI for March 2026, a higher monthly rise than previous months but still within moderate inflation levels. This caused some short-term market uncertainty but did not significantly raise probabilities for very high inflation outcomes.

Popular super greens supplement recalled amid salmonella outbreak

Above 4% surges to 33%18%

The recall of a popular dietary supplement due to salmonella contamination raised concerns about food safety and potential impacts on food prices, contributing to inflation uncertainty and affecting market inflation expectations.

Iran war drives up U.S. wholesale energy prices sharply

Above 4% rises to 15%3%

The ongoing war in Iran caused energy prices to surge, pushing wholesale prices up 4% year-over-year in March 2026. This increase in energy costs contributed to inflationary pressures, raising market expectations for inflation outcomes above 4%.

January 2026 CPI shows 0.2% monthly increase, inflation remains moderate

Above 5% dips to 10%2%

The BLS released January 2026 CPI data showing a 0.2% increase on a seasonally adjusted basis, indicating continued moderate inflation. This data supported market views that inflation was not accelerating sharply, keeping probabilities for inflation above higher thresholds low.

Labor Department delays January jobs report due to government shutdown

Above 4% dips to 9%3%

The partial federal government shutdown delayed the release of the January 2026 jobs report, creating uncertainty about labor market conditions. This uncertainty contributed to volatility in inflation expectations, as labor market strength influences inflation dynamics.

Consumer spending drives U.S. economy growth at fastest pace in two years

Above 4% surges to 33%19%

The Commerce Department reported a 4.4% annualized GDP growth rate in Q3 2025, driven by strong consumer spending. Despite solid growth, inflation remained elevated, influencing market expectations that inflation would stay above 4%.

US voters overwhelmingly oppose taking Greenland by military force

Above 4% dips to 12%2%

Polls revealed nearly 9 in 10 Americans opposed military action to acquire Greenland, reflecting geopolitical tensions and uncertainty. While not directly linked to inflation, such geopolitical risks can influence energy prices and inflation expectations, indirectly affecting market pricing for inflation outcomes.

December 2025 CPI inflation steady at 2.7%, as expected

Above 4.5% dips to 7%2%

The BLS reported December 2025 CPI inflation at 2.7% year-over-year, unchanged from November, confirming the persistence of moderate inflation. This steady reading maintained market expectations that inflation would not spike, contributing to continued low probabilities for very high inflation outcomes.

BLS reports November 2025 CPI inflation at 2.7%, lower than expected

Above 4.5% drops to 9%10%

The Bureau of Labor Statistics released the November 2025 CPI report showing inflation at 2.7% year-over-year, below forecasts and indicating a cooling inflation environment. This report ended a data drought caused by a government shutdown and reassured markets that inflation pressures were easing, leading to a drop in market prices for higher inflation outcomes.

BLS Releases November 2025 CPI Showing Cooler-Than-Expected 2.7% Inflation

The Bureau of Labor Statistics released the delayed November CPI report showing headline inflation rose at a 2.7% annual pace, which was cooler than the 3.1% economists had forecasted.

Government shutdown delays January jobs report and other economic data

Above 4% dips to 14%4%

The partial federal government shutdown delayed the release of key economic data including the January jobs report, creating uncertainty about the labor market and inflation trends. This delay contributed to market volatility and cautious inflation expectations.

Grocery price inflation surges with fastest monthly pace since 2022

Above 4.5% jumps to 56%6%

Government data showed food prices rising sharply, with coffee and ground beef prices up nearly 20% and 15.5% respectively year-over-year in December. This defied claims of falling grocery prices and contributed to inflation concerns, supporting market prices for inflation above 4.5% and 5%.

Federal Reserve’s preferred inflation gauge ticks up in November

Above 4% surges to 33%19%

Consumer prices rose 2.8% in November 2025 from a year earlier, slightly higher than October's 2.7%, indicating inflation remained stubbornly elevated. This data reassured the Fed about the economy's solid footing but suggested inflation would stay above target, supporting higher inflation market prices.

Federal Reserve cuts interest rates three times to counter softer jobs market

Above 4% plunges to 18%29%

In late 2025, the Federal Reserve cut its benchmark interest rate three times to stimulate the economy amid a slowing labor market. This monetary policy action aimed to support growth but raised concerns about potential inflationary pressures, influencing market expectations for inflation to remain elevated.

Federal Reserve's preferred inflation gauge ticks up in November amid strong consumer spending

Above 4% plunges to 18%29%

The Commerce Department reported consumer prices rose 2.8% year-over-year in November, slightly higher than October, signaling persistent inflation. Solid consumer spending suggested the economy remained robust, reducing expectations for immediate Fed rate cuts and supporting higher inflation probabilities above 4%.

Wholesale prices surge 4% amid Iran war energy price spike

Above 4% plunges to 18%29%

The Iran war caused energy prices to soar, pushing U.S. wholesale prices up 4% year-over-year in March 2025, the largest increase in over three years. This surge in wholesale prices signaled inflationary pressures that influenced market expectations for higher inflation in 2026, particularly affecting the 'Above 4%' and 'Above 6%' outcomes.