The U.S. CPI exploded again in May, dashing hopes of peaking inflation in one fell swoop. After the data was released, the Biden administration quickly expressed its position, and threw the burden on the Federal Reserve both inside and out.

Data released on Friday showed that the U.S. CPI accelerated by 8.6% year-on-year in May. After a slight decline in April growth, it failed to continue to slow down. Instead, it refreshed the highest growth rate in 40 years set in March, which made the market feel great. Accident.

After the data was released, U.S. Treasury yields rose across the board, with the 10-year U.S. Treasury yield rising above 3.10% for the first time in a month. The three major U.S. stock indexes closed down collectively for three consecutive days. The Nasdaq closed down 3.52%, the S&P closed down 2.91%, and the Dow closed down 2.73%, all recording the largest closing decline since May 18 for two consecutive days.

In the face of high inflation, American consumer confidence collapsed. Data released on Friday showed the University of Michigan consumer confidence index fell to its lowest level since 1980.

Record gasoline prices, combined with stubbornly high food and housing costs, are adding to cost-of-living pressures for Americans, putting pressure on the Fed to raise rates faster and for the White House and Democrats More political issues, after all, U.S. inflation has only begun to “take off” since Biden took office.

Biden administration: Gives enough room to Fed

“Today’s report underscores why I have made fighting inflation my top economic priority…while it’s good to see key ‘core’ inflation slow,” U.S. President Joe Biden said in a statement after Friday’s data. , but it’s not falling as fast or as sharply as we have to see.”

Biden said the U.S. needed to “do more quickly to lower prices” and called on Congress to pass legislation to lower the cost of energy, prescription drugs and transportation.

In the face of accumulating livelihood issues, Biden’s approval rating has fallen to a new low, and the White House is trying to spread the pressure by constantly emphasizing the role of the Federal Reserve.

As early as the end of last month, Biden “threw the blame” on the Fed to fight inflation. A day before the meeting with Powell, Biden said that the Fed “has the main responsibility for controlling inflation” and said that he would not try to influence. Fed decision:

“Previous ones have belittled the Fed, and past presidents have tried to inappropriately influence Fed policy during periods of high inflation, and I’m not going to do that.”

The rhetoric reappeared after the data were released on Friday.

Brian Deese, director of the National Economic Council, said in the media on Friday that today’s data underscores the president’s long-standing stance that fighting inflation must be the top economic priority. “The Fed has the tools it needs, we is giving it the space it needs.”

White House economic adviser Cecilia Rouse also mentioned in a media interview that Biden gave the Fed “the space to do what they need to do.”

The Fed is under increasing pressure to control inflation.

Rate-hike expectations surged to the highest level of the cycle on Friday, with traders expecting the Fed to raise rates by 50 basis points each in June, July and September, while expectations for subsequent rate cuts also surged. Wall Street began to discuss whether the Fed will raise interest rates by 75 basis points. Barclays became the first major Wall Street bank to expect a 75 basis point rate hike, and even expected a rate hike of this magnitude next week. The swap market expects a 75 basis point rate hike in July. The probability of a basis point is 50%.

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