Wholesale inflation exceeded expectations in May, marking the fastest increase in over three years and signaling persistent price pressures beyond consumer goods. Energy costs and semiconductor prices—driven by AI chip demand—are the primary culprits [UPI, CBS News, Bloomberg Markets].

The surge is cascading through supply chains. Businesses are increasingly caught in the middle, facing higher input costs just as the Federal Reserve prepares for next week's meeting. The ECB has already moved to raise rates amid similar inflationary pressures [The Hill].

Trump dismissed concerns about inflation during remarks today, saying "I love the inflation," even as economists warn the trend could complicate Fed policy decisions [BBC Business].

**ALSO DEVELOPING:** Trump escalated rhetoric over Iran, threatening to "take" Kharg Island—Tehran's main oil hub—as US and Iranian forces exchanged strikes for a second straight day. A ceasefire appears increasingly fragile [Guardian, UPI].

**ON CAPITOL HILL:** A hazardous materials incident forced a lockdown and evacuation at the Pentagon [UPI]. Separately, the House rejected a short-term FISA extension, dealing a blow to Trump's pick for intel chief, Bill Pulte, whose nomination hinges on surveillance authority [PBS, NPR].

**ELECTIONS:** A top political handicapper moved three Senate races toward Democrats, signaling potential gains [The Hill].