US inflation hits 4.2%, rattling crypto and markets

US inflation hit 4.2% in May, the highest since 2023, mainly due to energy prices. This triggered declines in crypto markets and increased economic uncertainty.

Inflation in the United States accelerated in May 2026, reaching 4.2% year-on-year—the highest level since April 2023. This surge was primarily driven by energy prices, which contributed over 60% of the monthly increase, climbing by 3.9%. The core consumer price index, which excludes food and energy, rose 2.9% annually and 0.2% monthly. These figures matched forecasts, suggesting moderate underlying inflationary pressures despite the headline jump. Rising inflation has heightened concerns about the cost of living and fueled expectations that the Federal Reserve may keep or even raise interest rates. Financial markets and cryptocurrencies, including Bitcoin, reacted negatively to the data, reflecting ongoing sensitivity to persistent inflation and geopolitical tensions, particularly those linked to Middle East conflicts impacting energy prices.