The US CPI burst again in May, dashing hopes of a peak in inflation. After the data were released, the Biden administration was quick to take a stand, leaving the burden on the Fed.

Data released on Friday showed that US CPI growth accelerated by 8.6% in May from a year earlier, and failed to continue to slow after a slight slowdown in April, but surprised the market by refreshing the highest growth rate in four decades set in March.

Treasury yields rose across the board after the data were released, with the 10-year yield rising above 3.10% for the first time in a month. The three major indexes of US stocks closed down for three consecutive days, with the Nasdaq down 3.52%, the S & P down 2.91% and the Dow down 2.73%, the biggest closing decline since May 18 for the second day in a row.

American consumer confidence has shattered in the face of high inflation. Data released on Friday showed that the University of Michigan's consumer confidence index fell to its lowest level since 1980.

Record gasoline prices, coupled with high food and housing costs, are increasing pressure on the cost of living for Americans, forcing the Fed to raise interest rates faster and creating more political problems for the White House and Democrats. After all, US inflation has only begun to "take off" since Biden took office.

The Biden administration: giving the Fed plenty of room

"Today's report highlights why I make fighting inflation my top economic priority," U.S. president Joe Biden said in a statement after Friday's data. While it is good to see a slowdown in key 'core' inflation, it is not falling as fast and as sharply as we have to see. "

Biden said the United States needed to "do more quickly to lower prices" and called on Congress to pass legislation to reduce energy, prescription drugs and transportation costs.

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

At the end of last month, Biden gave the Fed the responsibility to fight inflation. a day before the meeting with Powell, Biden said the Fed had "the primary responsibility for controlling inflation" and said, he will not try to influence the Fed's decisions:

"my predecessor belittled the Fed, and in the past some presidents tried to improperly influence the Fed's decisions at a time of high inflation, and I would not do that. "

The story was repeated 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 highlighted what the president had always said that fighting inflation must be the top economic priority. "the Fed has the tools it needs and we are giving it the space it needs." "

CeciliaRouse, the White House economic adviser, also mentioned in media interviews that Biden gave the Fed "space to do what they need to do."

The Fed is under increasing pressure to control inflation.

Expectations for rate hikes surged to their highest level in the cycle on Friday, with traders expecting the Fed to raise interest rates by 50 basis points each in June, July and September, while expectations of subsequent rate cuts soared. Wall Street began to discuss whether the Fed would raise interest rates by 75 basis points. Barclays became the first major Wall Street bank to raise interest rates by 75 basis points, even next week, and the swap market expects a 75 basis point rate hike in July.