The rate is the highest since 1995, based on data compiled by Bloomberg. Partly as a result, the consumer sentiment index dropped to 64.7 from 71.7 in January — lower than analysts anticipated.

The PCE price index was projected to rise 0.1% in May, with the annual inflation rate at 2.3%, according to the Dow Jones ...

Median inflation expectations for the next year jumped to 3.6% in March from 3.1% in February, according to the New York Fed’s latest survey of consumer expectations.

Inflation, as measured by the Fed’s preferred gauge, was 2.5% in the year through February, still above the central bank’s 2% goal, but well below the multi-decade high of 7.2% reached in 2022.

At that time, the share of those expecting long-run inflation of more than 15% more than doubled, to 10%. Then, when the news about tariffs drew attention early this year, the share doubled again.

The Federal Reserve left its benchmark interest rate unchanged at a 4.25% to 4.5% range at its June meeting, making it the fourth consecutive meeting in which it held rates steady.

Among the uncertainties facing Federal Reserve officials as they debate the proper setting of monetary policy, one of the ...