US inflation spikes as tariffs, Iran war and AI demand hit prices; Mexico inflation eases

The United States personal consumption expenditures price index rose to a year‑over‑year 4.1% in May, well above the Federal Reserve’s 2% target. The Fed attributes the rise to higher import costs from tariffs imposed during the Trump administration, elevated energy prices linked to the conflict with Iran, and strong demand for artificial‑intelligence‑related hardware that strains semiconductor and data‑center supplies. These factors limit the central bank’s ability to lower interest rates despite solid economic growth.

In Mexico, the National Consumer Price Index slowed to 3.37% in June, the lowest level since December 2020. Core inflation fell to 4.03% but stayed above the Bank of Mexico’s 3% target. The central bank therefore left its policy rate unchanged at 6.5% and signalled it will likely keep rates steady for the foreseeable future.