Inflation Isn't Just a Trumpflation Problem Any Longer -- There's a New Culprit, and It Has Potentially Dire Implications for Wall Street

U.S. inflation reached 4.2% in May 2026, more than double the Federal Reserve's 2% target. While Trump's tariffs and the Iran war initially drove inflation, the Federal Reserve now identifies AI infrastructure buildout as a significant new inflationary driver. Supply shortages for AI chips and components are creating pricing power for semiconductor companies, but this persistent inflation could prompt rate hikes that threaten the expensive stock market and slow the AI data center expansion.