Trump calls 4.2% inflation 'great' as energy prices surge 23.5% on Hormuz blockade
US President Donald Trump told reporters 'I love the inflation' after May consumer prices rose 4.2% year-on-year, the fastest pace in three years, driven by the Iran war and Strait of Hormuz disruptions.
The remark
US President Donald Trump responded to a journalist's question about rising inflation with an unorthodox declaration.
He did not explain why he considered it positive that Americans are paying significantly more for daily shopping and petrol. He did, however, predict that inflation would ease, without offering a rationale for that forecast. One article noted he insisted energy prices would fall once the Iran war ends, though recent mutual attacks suggest no imminent resolution.The numbers were great. I love the inflation.
The inflation data
On Wednesday the US Labor Department reported that inflation crossed 4% in May for the first time in three years. Consumer prices rose 4.2% compared with the same month a year earlier, marking the second consecutive month of sharp acceleration and pushing further above the Federal Reserve's 2% target. The energy component drove the increase: energy costs were 23.5% higher than a year ago, with petrol prices up roughly 40%.
The Hormuz bottleneck
The surge traces directly to the Iran war and the blockade of the Strait of Hormuz, which has severely constrained global energy supply. Firms are now paying much more for oil, gas, and fertiliser. The US Energy Information Administration (EIA) has sharply revised its crude price outlook. In February the agency forecast an average Brent price of $58 per barrel for 2026; it now expects $95. For 2027, the projected average drops to $79, still well above the $53 the EIA had pencilled in back in February.
- April 2026
- 3.8 %
- May 2026
- 4.2 %
Fed and market expectations
Investors expect the Fed to hold rates steady at its June meeting. The articles note that the inflation trajectory complicates the central bank's position, with the 2% target now receding further from reach. One source flagged that repositioning out of highly valued technology stocks was already underway, though details were truncated in the available text.
- EIA February forecast: $58/barrel average for 2026, $53 for 2027
- EIA revised forecast: $95/barrel for 2026, $79 for 2027
