Federal inflation data released on Thursday showed prices recording their fastest annual increase in three years, presenting severe challenges for President Donald Trump and economic policymakers.

The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation metric, revealed that prices rose 4.1% over the past year, with a 0.7% increase in May alone.

While a significant portion of the increase was driven by high energy prices linked to the war in Iran, the broad-based nature of the price increases in May has alarmed economists.

Five key takeaways emerge from the newly released data:

The rising cost of the war in Iran

The new PCE report underscores the stark costs of the war in Iran, where global supplies of oil and other key commodities have been disrupted following the closure of the Strait of Hormuz.

US households spent $552.8 billion on gasoline and other energy products in May, up from $422.3 billion in February and $401.6 billion in May 2025.

Prices for gasoline and energy products rose by 6.5% in May, following a 20.9% surge in March and a 5.5% increase in April. March marked the first full month of the war in Iran.

“Inflation is at a three-year high because of the war in Iran, and it’s a grinding process for middle- and lower-income Americans,” Heather Long, chief economist at Navy Federal Credit Union, wrote in an analysis.

Trump’s cost-of-living challenge deepens

President Trump last week expressed confidence that inflation would quickly recede following an agreement reached with Iran that allowed a significant resumption of oil trade through the Strait of Hormuz.

In response to that development, crude oil prices fell sharply, and retail gasoline prices began trending downward in June.

However, Long warned that the May inflation data shows Americans are facing a much deeper cost-of-living crisis even as they wait for gasoline prices to permanently fall.

Even excluding volatile food and energy costs, core annual inflation reached 3.4% in May. The core index rose 0.3% last month alone, remaining well above the Fed’s 2% annual target.

“The inflation spike isn’t just about oil,” Long said. “Shelter, healthcare, and electricity are also squeezing family budgets and driving overall inflation.”

Trump already faced severe voter backlash over inflation before launching the war in Iran. Having campaigned during the 2024 presidential race on a promise to bring down prices, the president and Republicans are struggling to convince voters they can be trusted on the issue.

Trump also abruptly canceled a signing ceremony scheduled for Wednesday for a bipartisan housing bill that passed the House of Representatives earlier this week, disrupting what could have been a key legislative victory for the Republican Party ahead of the midterm elections.

While Trump initially said he was holding up the legislation due to a dispute with Senate Republicans over a voting rights bill, he told reporters at the White House on Wednesday that only lower interest rates would truly revive the housing market.

“It’s all about the interest rate,” Trump said. “Get the interest rate down.”

Rising pressure on the Fed over interest rates

Following the hot inflation data, a near-term interest rate cut by the Federal Reserve is increasingly seen as highly unlikely.

Members of the Fed’s rate-setting committee voted unanimously last week to hold interest rates steady as inflation continued to rise and the labor market showed signs of improvement.

The combination of high inflation and resilient economic activity undercuts the likelihood of the Fed stimulating the economy through interest rate cuts. If both inflation and labor demand continue to climb, the Fed may even be forced to raise rates.

Bill Adams, chief US economist at Fifth Third Bank, offered the following assessment:

“If core inflation is still running at these rates in September, or if labor supply constraints start pushing the unemployment rate down, a rate hike will become likely,” Adams said. “In the near term, the biggest upside risks to inflation come from the AI boom straining prices for electronics and power, and from labor-intensive services in industries with high shares of foreign-born workers.”

Global volatility clouds the outlook

A long-term resolution to the war in Iran could help bring down gasoline prices and ease broader inflationary pressures.

However, lingering uncertainties over the US-Iran deal and Israel’s continued military pressure on Lebanon keep the risk of new flashpoints alive.

The Islamic Revolutionary Guard Corps (IRGC) said on Thursday that despite efforts by international bodies to restore normal maritime traffic in the Gulf, tankers must navigate Iranian-controlled routes in the Strait of Hormuz or risk attack.

According to data and analytics firm Kpler, the United Nations International Maritime Organization launched an operation earlier this week to evacuate more than 11,000 seafarers from the strait, confirming Thursday that the number of transiting vessels had risen to 70.

Economic activity persists despite price hikes

The US economy has remained resilient in the face of high inflation, buoyed by rising consumer spending and falling weekly jobless claims.

Inflation-adjusted consumer spending rose 0.3% in May, even as prices climbed at a faster pace.

This indicates that consumers are largely funding their expenditures through savings or stock market gains.

“The personal saving rate has fallen to 3% in recent months, down from 4.6% in 2025, which suggests consumers are dipping into savings or drawing on wealth to fund spending,” said Michael Pearce, chief US economist at Oxford Economics. “Rising financial wealth continues to support spending among higher-income households.”

A new public opinion poll conducted in the US shows that the proportion of American voters who believe the Washington administration is providing too much support to Israel has reached its highest level on record.

According to the survey, which was conducted by Quinnipiac University, 48% of respondents stated that the US provides “too much” support to Israel. Meanwhile, 7% said this support is “not enough,” 38% described it as “about right,” and 6% of participants remained undecided or did not answer the question.

“This is the highest level of voters who think the US is supporting Israel too much since Quinnipiac University first asked registered voters this question in January 2017,” the researchers who prepared the study noted.

When analyzed by political affiliation, 66% of surveyed Democrats, 55% of independent voters, and 20% of Republicans registered the view that the US supports Israel too much.

In recent years, Israel has been the focus of global criticism, particularly due to the manner in which it has conducted its military operations in Gaza. The war launched by Israel more than two years ago targeting Hamas has led to mass deaths among Palestinians in Gaza and the extensive destruction of infrastructure.

Separately, the US joined the current war alongside Israel against Iran approximately four months ago. Recent polling indicates that this step is unpopular among the American public.

Last week, US Vice President Vance warned Israeli officials not to criticize the peace agreement recently reached between Washington and Tehran. Vance implied that Israel, which is globally isolated, should be grateful for its partnership with the US.

Speaking at a press conference held at the White House, Vance said, “If I were in the Israeli government’s cabinet, I probably wouldn’t attack the only powerful ally I have left in the entire world.”

The Quinnipiac poll, conducted between June 18 and June 22, surveyed 1,165 individuals who identified themselves as registered voters. The margin of error for the study was reported as plus or minus 3.4%.

Abelardo de la Espriella, who is poised to become Colombia’s next president, is forging deep institutional connections with Europe’s far-right political parties.

According to preliminary election results, De la Espriella won Colombia’s presidential election on Sunday, narrowly defeating human rights activist Iván Cepeda. Ahead of his electoral victory, De la Espriella traveled to Madrid in January to hold talks with Santiago Abascal, the president of Spain’s right-wing Vox party.

During the visit, De la Espriella joined Foro Madrid, an organization established by Vox’s party foundation to link right-wing and far-right groups across Spain and Latin America.

Other prominent right-wing figures in the region, including Chilean politician José Antonio Kast and Venezuela’s US-backed opposition leader María Corina Machado, are also part of this network.

Vox acts as a facilitator for relations between the Latin American right and the European far right, including connections with the Patriots for Europe (PfE) group in the European Parliament.

US President Donald Trump openly intervened in the Colombian election campaign to back De la Espriella, who has campaigned on a platform of “eradicating the left.”

De la Espriella: Attorney to paramilitaries and drug barons

Abelardo de la Espriella is recognized as a close associate of Álvaro Uribe, the right-wing politician who served as Colombia’s president from 2002 to 2010 and continues to wield significant political influence in the country.

A millionaire of many years, De la Espriella built his career as a high-profile defense attorney. His client list has included notorious right-wing paramilitaries, politicians allied with them, and prominent drug barons.

Among his clients was Salvatore Mancuso, a paramilitary commander and drug trafficker who was extradited to the US in 2008, where he was sentenced to 15 years in prison.

The Spanish daily newspaper El País previously described De la Espriella as the “lawyer of the mafia.”

In July, De la Espriella declared that he would do “everything in his power” to “eliminate” leftist politicians and activists, stating, “This plague must be eradicated.”

One of his campaign advertisements depicted him kneeling on the back of his electoral opponent, Iván Cepeda, pinning him heavily to the ground.

More recently, the president-elect was forced to defend his conduct after showing a female journalist a photograph of his lower body.

The image reportedly showed a prominent bulge in the groin area of his tight trousers. He reportedly told the journalist, “Come closer and tell me what you see.”

End of the “negotiation” era with guerrilla organizations

The formal political objectives pursued by De la Espriella during his campaign align closely with plans outlined by US President Donald Trump for restructuring the Colombian state.

De la Espriella has announced that his administration will no longer seek to resolve Colombia’s ongoing internal conflicts with remaining guerrilla factions and drug cartels through negotiations—the approach favored by outgoing President Gustavo Petro. Instead, he intends to rely on military force.

Proposed measures include launching airstrikes against guerrilla positions and resuming the aerial spraying of the controversial herbicide glyphosate over coca plantations.

According to analytical assessments, the consequences of such a securitized policy are likely to be “catastrophic,” particularly for rural areas.

Furthermore, De la Espriella has announced plans to construct 10 “mega-prisons” in remote regions of the country, which would likely operate under private-sector control.

These facilities are modeled on the high-security prisons established in El Salvador under President Nayib Bukele, where human rights organizations have repeatedly documented abysmal conditions.

On the economic front, De la Espriella advocates for drastic cuts to public spending, targeting a 40% reduction in state expenditures.

His economic policy model is Argentine President Javier Milei.

US-independent foreign policy sidelined

In foreign policy, De la Espriella aims to bring Colombia back under direct US alignment.

To this end, the incoming leader has announced “Plan Colombia 2.0.” The original Plan Colombia, implemented in the 2000s, involved billions of dollars in US weapons purchases alongside joint military operations with US forces on Colombian soil, which ultimately resulted in a dramatic escalation of violence.

De la Espriella has also declared his intention to join the “Shield of the Americas” initiative. This alliance, established in March by the Trump administration, links the US with Latin American and Caribbean nations governed by right-wing administrations.

Trump spoke highly of De la Espriella and openly supported him throughout the campaign.

Immediately following De la Espriella’s victory in the first round of the presidential election, Trump declared on social media that the election outcome was vital for Colombia’s relations with the US and offered his “full and complete endorsement.”

The Trump administration’s involvement in the Colombian campaign extended beyond rhetoric.

Shortly before the elections, US Secretary of State Marco Rubio ordered the arrest of Beto Coral, a Colombian activist who had applied for asylum in the US, and set in motion plans to deport him.

The action was taken after Coral spoke out publicly against De la Espriella. Rubio defended the decision, arguing that Coral’s continued presence in the US “would harm the foreign policy interests of the United States.”

Vox: The “facilitator” between European and Latin American right-wing networks

De la Espriella’s political network extends beyond the US to include influential figures in Europe.

At a major campaign event held in Bogotá on November 3, 2025, to support De la Espriella’s presidential bid, attendees included Alvise Pérez, a Spanish Member of the European Parliament and founder of the right-wing party Se Acabó La Fiesta (SALF).

The party’s two representatives in the European Parliament sit with the European Conservatives and Reformists (ECR) group.

On January 13, De la Espriella met in Madrid with Santiago Abascal, the leader of Spain’s Vox party, which maintains extensive ties to Latin America.

On the same day, De la Espriella joined Foro Madrid, an alliance founded in 2020 by Fundación Disenso, a think tank affiliated with Vox and officially chaired by Abascal.

Foro Madrid serves to coordinate right-wing and far-right forces in Latin America, linking them directly to Spain’s political right, particularly Vox.

Vox is a member of the Patriots for Europe (PfE) group in the European Parliament, an alliance that includes Marine Le Pen’s National Rally (RN) in France, Matteo Salvini’s Lega in Italy, and Viktor Orbán’s Fidesz in Hungary.

Through these institutional channels, Colombia’s incoming president is integrated into Europe’s broader right-wing and far-right political network.