A customer shops at Handy Market in Burbank, California, May 14, 2026.<\/p>\n
Justin Sullivan | Getty Images<\/p>\n
Inflation numbers out Wednesday are expected to cross another unpleasant threshold as the cost of living continues to climb for U.S. consumers.<\/p>\n
If the Wall Street consensus is correct, the consumer price index<\/a> is expected to show inflation running at a 4.2% annual rate off an expected 0.5% monthly gain in May. That would mark the first time the CPI has passed 4% since May 2023 and would be the highest reading since April of that year.<\/p>\n Of course, much of the rise in the headline number, which was at just 2.4% a year ago, can be attributed to the surge in energy costs<\/a> resulting from the Iran war. <\/p>\n However, even core prices, which exclude food and energy, are projected to post a 2.9% annual reading after rising 0.3% in May, according to Dow Jones.<\/p>\n Inflation burst<\/p>\n Worries are accelerating that the burst of inflation is broadening<\/a>, as the jump in oil prices starts to spread through the economy and raise expectations<\/a> that inflation isn’t dissipating anytime soon.<\/p>\n “It’s not just an oil story, it’s a money supply story, and it’s increasingly an AI story,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “So this is a broader inflation problem than just energy, meaning that we probably still have somewhat sticky inflation.”<\/p>\n Sonders added that “a lot of this skittishness” from investors is about inflation, so “something worse than expected probably doesn’t sit well with the equity market.”<\/p>\n The Trump administration has made the case that inflation will come down quickly once the fighting in the Middle East settles down.<\/p>\n However, Sonders advised against counting on that with so much damage already done to supply.<\/p>\n “Even if there would be a quick resolution to the war, you probably wouldn’t see oil prices come down to prior lows, because there’s been so much disruption to production,” she said. “That’s not something that a switch can just be turned back on.”<\/p>\n Annual headline inflation was 3.8% in April while the core rate stood at 2.8%.<\/p>\n The Bureau of Labor Statistics will release the report at 8:30 a.m. ET.<\/p>\n