• The new CPI report showed annual inflation jumped to 4.2% in May, the highest rate since April 2023.
• Data last Friday showed job growth has been healthy, so economists expect the Fed to focus on inflation.
• Next week's meeting marks the first interest rate decision with Kevin Warsh as Fed chair.

US annual inflation accelerated to 4.2% last month, new consumer price index data showed, as expected. That adds to the recent trend of inflation speeding up, reaching the highest rate since April 2023.

The inflation report is just one in a recent string of economic releases. The Bureau of Labor Statistics published its jobs report this past Friday, which showed job growth blowing past expectations, even better gains than previously reported in March and April, and steady unemployment.

Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, told Business Insider that while the job market is healthy, it's still a tough time to be looking for work. Long-term unemployment and the median number of weeks people had been unemployed inched up in May.

Several economists said in commentary on Friday that the Fed will focus on inflation, given recently solid job growth. CME FedWatch, which estimates probabilities for where interest rates will go based on market moves, showed before the new consumer price index report a 98% chance that rates will be unchanged at next week's meeting. This will be Kevin Warsh's first time leading the meeting as Fed chair since Jerome Powell's tenure ended. Powell is staying on the board; it's to be seen how long he stays on, but his term ends in 2028.

This is a developing story. Please check back for updates.