US retail regular gasoline averaged $4.56 a gallon the week of May 21, 2026, 3 cents higher than the prior week and $1.38 (43%) above the same week last year. The EIA’s May 19 print, the Monday-before-Memorial-Day benchmark, was $4.49, 42% above 2025 and the highest pre-holiday reading since 2022, when oil climbed after Russia’s invasion of Ukraine. The underlying driver is the same now as then: a war-risk premium on crude, this time tied to Strait of Hormuz tensions flagged in the May FOMC minutes released May 21.
The macro read-through is the move in inflation expectations. The 5-year breakeven inflation rate, derived from the spread between nominal Treasuries and TIPS, sat at 2.59% in May, the high end of its 2026 range and roughly 30 basis points above the February low. Gasoline carries an outsize weight in consumer inflation perception even though it is only about 3.4% of the CPI basket, which is one reason the University of Michigan five-year inflation expectations series rose to 3.2% in the preliminary May read. Headline CPI energy was already running 5.1% year over year in April. If pump prices hold near $4.56 through June, the energy contribution to headline CPI shifts from neutral to additive, complicating the disinflation narrative the Fed has been leaning on.