Fresh US Inflation Peak to Keep Fed on Aggressive Rate Path

Inflation continued to heat up in June, hitting a fresh pandemic peak that keeps the Federal Reserve geared for another big interest-rate hike later this month, economists project.

The consumer price index probably increased 8.8% from a year earlier, marking the largest jump since 1981, according to the median forecast in a Bloomberg survey. Compared to May, the widely followed gauge is seen climbing 1.1%, marking the third month in the last four that inflation has advanced at least 1%.

The acceleration is likely to reflect higher gasoline and elevated food costs. Prices at the nation’s gas pumps reached a high of more than $5 a gallon in mid-June and will add at least 0.5 percentage point to the headline CPI monthly advance, according to Bloomberg Economics ahead of Wednesday’s report.

High gas prices, which were increasing well before Russia invaded Ukraine, help explain both President Joe Biden’s dismal approval ratings and his upcoming trip to the Middle East, where he hopes to convince Arab leaders to produce more oil.