Inflation hit the highest level in almost three years as the Fed releases the first inflation report under new chair Kevin Warsh

Inflation jumped to 3.8% in April compared with a year ago, the Commerce Department said Thursday, up from 3.5% in March and the highest since May 2023. On a monthly basis, prices rose 0.4%, down from the 0.7% jump in March.

The report showed that prices have risen for many items in addition to gas, indicating that inflation could persist and pose problems for congressional Republicans in this year’s midterm elections. Inflation is also notably above the Federal Reserve’s target of 2%, which means Fed policymakers may decide to forego any cuts to their key short-term interest rate this year. Some officials have signaled that their next move could be a hike rather than a cut.

Excluding the volatile food and energy categories, core inflation rose to 3.3% in April from 3.2% the previous month. It is the highest core figure since November 2023. One positive sign in the report: Core prices rose just 0.2% in April from March.

Higher prices are also cutting into consumers’ incomes, which were unchanged in April from March. Adjusted for inflation, incomes actually slipped 0.1% last month.