U.S. inflation climbs to 4.2%, the highest in three years, amid surging oil prices

U.S. inflation reached a three-year high of 4.2% in May, driven primarily by surging oil prices, which has put pressure on consumer finances and savings. The Federal Reserve is expected to hold interest rates steady but may remove language suggesting future rate cuts, with markets anticipating a potential hike by year-end. While core inflation excluding food and energy remained modest, rising costs for goods like clothing and airline fares are contributing to broader price increases.

• •U.S. inflation hit 4.2% in May, highest in three years.
• •Rising oil prices are the main driver of inflation.
• •Federal Reserve may shift from rate cuts to potential hikes.