Inflation is back above 4% for the first time since 2023—but Kevin Warsh might catch a break
US inflation surged to 4.2% in May, driven primarily by a significant increase in energy prices due to geopolitical tensions. While core inflation, excluding food and energy, remained subdued at 2.9%, the overall rise complicates the Federal Reserve's decision-making. New Fed chair Kevin Warsh faces pressure to justify rate cuts amid concerns that persistent inflation, potentially exacerbated by AI build-out costs, could outpace wage growth and erode consumer sentiment. AI
IMPACT Potential AI build-out costs could contribute to inflation, complicating Fed policy and impacting borrowing costs for AI companies.