All eyes on Fed's next move as US inflation jumps to 5% in May

Beating analysts' expectations

Anna Fedorova
clock • 3 min read

US inflation jumped to 5% year-on-year in May from 4.2% in April, beating analysts’ expectations of a 4.7% increase, as the US economy continues its swift recovery from the shock of the pandemic.

Core inflation also increased to 3.8% year-on-year, more than the expected 3.5%, marking the fastest annual rate of increase since June 1992. The surge in core inflation is in part due to the successful vaccine rollout in the US, which has allowed consumers to spend their savings - J.P. Morgan Asset Management estimates that US consumers will have accumulated excess savings amount to a "whopping 12% of GDP" by the middle of the year. Bond markets seemed to shrug off the latest news, with 10-year US treasury yields up only slightly from closing at 1.49% yesterday (9 June) to 1.515% at ...

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