'I love inflation,' says Trump, as US prices rise at fastest pace in 3 years

Donald Trump said he 'loves inflation' when commenting on new price rises in the US
EPA via BBC
United States President Donald Trump said on Wednesday (10) that he "loves inflation" - after new data showed that prices rose last month at the fastest pace in three years in the country.
Data from the Bureau of Labor Statistics (BLS) showed that prices rose 4.2% in May compared to a year before. The increase, 3.8% in April, was driven by rising energy costs in the wake of the US-Israeli war in Iran.
"I love it. The numbers were great. You know what I really love? I love inflation," Trump said at the White House.
Trump promised that inflation will "drop like a stone" when the war with Iran ends. Later the same day, the US military bombed Iran.
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Reacting to inflation numbers on Wednesday, the president said US forces carried out nighttime operations to remove "millions of barrels" of oil from Iran, which he said contributed to a slight drop in prices.
"When this conflict is over... you will see the [price of] oil drop to where it was before," Trump told reporters at the House White.
The main global oil index, Brent, is still trading significantly above pre-war levels.
Trump later told the New York Post that his comments were taken out of context and that he meant that inflation is "much lower than anticipated" despite the war in Iran.
High US inflation
Wednesday marked the third consecutive month of increases in the US Consumer Price Index (CPI), with consumers increasingly feeling the impact of the US and Israeli war in Iran.
Trump has said on other occasions that inflation is rising only temporarily and that he expects it to slow quickly once the war ends.
Inflation is still well below the 9.1% peak during his predecessor Joe Biden's administration in mid-2022.
Still, it poses a political problem for Trump, given that voters have ranked the economy as a top concern ahead of November's midterm elections.
Surge inflation This increase increases the likelihood that the Federal Reserve will raise interest rates in an attempt to curb spending.
Overall, energy bills - including gas and electricity - were almost a quarter higher in May than they were a year earlier, with gasoline responsible for much of that increase. significant compared to the US$2.98 (R$3.40 per liter) recorded on February 28, when Trump launched attacks against Iran.
In response to the attacks, Iran closed the Strait of Hormuz, through which the transport of about a fifth of the world's oil and gas normally passes, restricting supply.
On Wednesday night, the US military said it had launched attacks against Iran for the second time in two days.
Both sides have traded attacks this week - despite a ceasefire that came into force in April. The conflict began more than three months ago.
Fuel has driven the rise in inflation in the US
Getty Images via BBC
The BLS data also pointed to the increase in the costs of airline tickets, personal and medical care, leisure and communication.
The CPI measures the rise in prices in a given month compared to the same month in the previous year. The Fed's long-term inflation target is 2%.
Economists have warned that even with a quick resolution of the war in Iran, it could take until 2027 for the normal flow of goods through the Strait of Hormuz to be reestablished.
Trump promised in his 2024 campaign that reducing inflation would be at the center of his agenda.
But his Wednesday comment, apparently enthusiastic about rising prices, was exploited by opponents. Senate Democratic leader Chuck Schumer wrote on the X network: "His contempt for you knows no bounds."
Trump was also criticized last month for saying he was not "in the slightest" influenced by Americans' financial situation as he tried to ensure that Iran does not develop nuclear weapons.
Challenge for monetary officials
Higher inflation also poses a challenge for Kevin Warsh, the new chairman of the Federal Reserve, ahead of his first interest rate decision as head of the central bank in next week.
When inflation is significantly above the Fed's target, the central bank's board of governors typically chooses to raise interest rates. This, in turn, raises borrowing costs and restricts the flow of money through the economy, limiting further price increases and bringing inflation under control.
In the run-up to Warsh's nomination, Trump repeatedly called on his predecessor, Jerome Powell, and the central bank to lower interest rates.
Economists expect rates to remain at their current level, between 3.5% and 3.75%, next month, but warned that further evidence of persistent inflation could force the Fed to raise them.
Stephen Brown, chief North America economist at Capital Economics, said May's hike alone is "not big enough to provide ammunition" to those on the Fed's rate-setting committee who want to raise them.
But Isaac Stell, investment manager at Wealth Club, said an interest rate hike is "the most logical conclusion based on today's data combined with the week's solid jobs numbers past."

Source: G1