The US inflation rate has hit a 3-year high, potentially reinforcing expectations of a Fed interest rate hike this year

BlockBeats News, June 25th - Data released on Thursday showed signs of a rebound in U.S. consumer demand amidst rising inflationary pressures, accompanied by a noticeable acceleration in price levels. The U.S. inflation rate in May surged to 4.1%, reaching the highest level in over three years, while consumer spending increased by 0.3%, demonstrating demand resilience. At the same time, first-quarter GDP was revised up to 2.1%.

Analysts pointed out that this stronger data is likely to reinforce the market's expectation of the Fed raising interest rates later this year.

The Fed kept rates unchanged last week in the 3.50%-3.75% range, but updated quarterly projections indicate policymakers' increasing concerns about inflation and their anticipation of rate hikes this year. The financial markets are betting that the earliest rate hike could occur in September, with potentially another hike thereafter.