The annual U.S. inflation rate defied expectations and reached a new multi-decade high of 9.1% a year through June.
The U.S. Bureau of Labor Statistics said Wednesday that the cost of living rose 1.3 percent in June alone and in three of the last four months.
Rising costs for gasoline, housing and food were the main drivers of the annual increase. Energy prices rose 41.6 percent last year. Food costs have risen by 10.4%. Housing costs have risen 5.6 percent.
Economists expected the rate to decline slightly from the 40-year high of 8.6% in the previous month, but instead rose even further, reaching its highest point since 1981.
Royce Mendes, an economist at financial services conglomerate Desjardins, called the figures “hot” and says they will likely force the US central bank to raise lending rates even more aggressively in the coming months, raising its rate by 0.75 percentage point in August and again in September.
“The Fed will be relieved that commodity prices and market-based inflation expectations have fallen recently. But that will not be enough to alter its short-term plans,” it said in a note to clients.