U.S. inflation soars to 3.8%! The Iran war and the AI computing power surge are simultaneously driving up global prices.

On May 12th, the U.S. April CPI year-over-year rose to 3.8%, hitting a nearly three-year high.
Several economists warn that this round of inflation is no longer just an "energy crisis," but a systemic cost shock triggered by the Iran war and the expansion of AI infrastructure.
Data shows U.S. gasoline prices increased by 28.4% year-over-year, and fuel prices surged by 54.3% year-over-year.
Meanwhile, food prices rose 0.7% month-over-month in April, and electricity prices increased by 2.1% in a single month.
KPMG Chief Economist Diane Swonk said that compared to the Russia-Ukraine conflict period, this round of impact is more dangerous because the issues are beginning to spread across the supply chain.
She pointed out that diesel shortages are driving up costs in agriculture, logistics, and shipping, while AI data center construction is causing new pressures on chip, helium, and electricity supplies.
"This is no longer just an energy issue; it’s a supply chain crisis," the report states.
AI infrastructure development is boosting demand for memory chips and continuously increasing electricity loads in data centers, with opposition to large data center projects rising among some state and local governments.
Meanwhile, Americans’ real incomes are starting to be eroded by inflation.
Analysts believe the Federal Reserve is currently in a "no-win situation":
— Continuing to raise interest rates would further weaken the already fragile labor market;
— Cutting rates or maintaining easing could lead to more prolonged and stubborn inflation.
The new frontrunner for Fed Chair, Kevin Warsh, is about to succeed Jerome Powell, but markets generally believe the policy environment he faces will be extremely challenging.