US inflation hits three-year high

US inflation has surged to a three-year high of 4.2% in May, driven by a 23.5% spike in energy prices and persistent global supply pressures, despite President Donald Trump's repeated claims that inflation was under control. The data has reignited debate over the Federal Reserve's next move, with analysts suggesting a cautious 'wait and see' approach ahead of Kevin Walsh's first meeting as chair. While core inflation (excluding food and energy) held steady at 2.9%, businesses from coffee roasters to soybean farmers report mounting cost pressures—especially from fuel, shipping, and fertilizer—forcing them to pass costs onto consumers. Homebuyers in cities like New York face shrinking budgets due to high interest rates, while rental prices continue to soar. Meanwhile, China's inflation remains subdued at 1.2%, reflecting weak domestic demand and a housing market downturn, despite global energy shocks. In contrast, the World Cup is failing to deliver economic booms in host cities like Mexico City, where protests and political tensions have dampened tourism and business activity. Even major brands like Nike and Starbucks face strategic challenges, with Nike downgraded due to competitive pressures and Starbucks exploring a potential IPO in Japan. The episode reveals a global economic divergence: rising costs in the US, stagnation in China, and uneven gains from global events like the World Cup.