The U.S. economy has surged back into full throttle after two months of slower growth, with flash PMI data for May indicating the fastest expansion in over two years. However, this growth is accompanied by a rebound in input costs, raising concerns about the feasibility of returning to the Fed's 2% inflation target.

The U.S. Composite PMI, a key indicator of private sector economic health, jumped to 54.4 in May, up from April's 51.3. This marks the highest level since April 2022 and exceeds market expectations of 51.1, according to preliminary data released by S&P Global.

Both the services and...