Trump vows fresh strikes on Iran as US inflation hits three-year high of 4.2 percent

President Donald Trump said on Wednesday 10 June that the United States would resume military strikes against Iran on the same day, citing Iran's downing of a US Army Apache helicopter near the Strait of Hormuz as justification, while acknowledging that nuclear negotiations were still under way.

"We're going to be attacking them, attacking them very hard," Trump told reporters in the Oval Office. "We hit them hard yesterday and we're going to hit them hard again today." He also said the two sides were "really close to a deal" but accused Tehran of "playing us for suckers."

The remarks followed a Truth Social post in which Trump wrote that Iran had "taken too long to negotiate a deal" and would now "pay the price". Less than 48 hours earlier, the president had said a deal could be "two or three days" away.

The helicopter incident

US Central Command said American forces launched "self-defence strikes" against Iran on Tuesday 9 June in response to the downing of the AH-64 Apache, describing the action as "a proportional response to unjustified Iranian aggression." The strikes targeted air defence, ground control stations and radar sites near the Strait of Hormuz, CENTCOM said. The two crew members aboard the helicopter were rescued by American forces within two hours, CENTCOM confirmed.

Iran dismissed Trump's account of the incident as a "false pretext" for US aggression, in a statement carried by the semi-official Fars news agency. Iran's Revolutionary Guards said on Wednesday they had launched retaliatory missile and drone attacks on a US military base in Jordan and other American-linked targets across the Persian Gulf.

Iran's state-run broadcaster also reported that US strikes had hit two water reservoirs in Hormozgan province on the coast of the Strait of Hormuz. Trump did not rule out further strikes against critical civilian infrastructure, including power plants and bridges, telling Fox News: "I may keep going. They had a chance to sign a deal and survive."

Iran's response

Iranian President Masoud Pezeshkian said Iran would "stand firm against any pressure or threat" following Trump's infrastructure warnings. "Threatening to target them — from transportation networks to the electricity and water industries — is not a show of strength but a sign of desperation in the face of a nation's will," Pezeshkian wrote on X.

Iran's Foreign Ministry spokesman Esmail Baghaei said on Wednesday that the impact of the latest military clashes on talks with Washington would need to be evaluated, adding: "Diplomacy and the battlefield are not separate matters; they exist alongside and complement one another."

Reuters reported that Qatari negotiators travelled to Tehran on Wednesday after consultations with Washington in an effort to finalise a deal, though no agreement was announced.

Inflation breaks above 4 percent

On the same day, the US Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers rose 0.5 percent in May on a seasonally adjusted monthly basis, putting the annual rate at 4.2 percent — up from 3.8 percent in April and the highest reading since April 2023, according to the BLS.

Energy costs drove the surge: the energy index rose 3.9 percent on the month and 23.5 percent over the year. Gasoline prices jumped 7 percent on the month and 40.5 percent year-on-year. The BLS said the energy index accounted for over 60 percent of the overall monthly CPI increase. Food prices rose a more modest 0.2 percent on the month and 3.1 percent annually.

Core CPI — which strips out food and energy — rose a softer-than-expected 0.2 percent for the month and 2.9 percent year-on-year, suggesting that war-driven energy costs had not yet spread widely into the rest of the economy. Both the headline and monthly figures were in line with the Dow Jones and FactSet consensus forecasts.

Trump brushed off the data, telling reporters: "The numbers were great. I love the inflation." He has repeatedly argued that prices will fall sharply once the war with Iran ends.

Economists were less sanguine. "Americans are getting squeezed financially by inflation that's back at a three-year high," said Heather Long, chief economist at Navy Federal Credit Union, noting that gas, food, electricity and medical care were all posting above-3-percent inflation. Analysts at Oxford Economics suggested the rate may not cool until 2027. Some forecasters said May could represent the peak for 2026, with the annual rate potentially easing later in the year if energy prices stabilise.

Regional and global dimensions

French President Emmanuel Macron said leaders from Egypt, Saudi Arabia, Qatar and the United Arab Emirates would be invited to join a G7 session in France the following week to discuss the war and the closure of the Strait of Hormuz, which he said was having "a real impact on our economies" through soaring fuel prices.

China's Foreign Ministry urged all parties to "remain calm, exercise restraint" and stop escalating tensions, while Russia's Foreign Ministry called for the crisis to be resolved "solely through diplomatic means".

India lodged a "strong protest" with the US deputy chief of mission in New Delhi after a US strike disabled the oil tanker M/T Settebello in the Gulf of Oman on Wednesday, leaving three Indian crew members missing. CENTCOM said a US aircraft fired precision munitions at the vessel's engine room after the crew "repeatedly failed to comply with directions from American forces". Twenty-one crew members were rescued.

The war has now surpassed its 100-day mark. Israeli strikes targeting Hezbollah in Lebanon have killed over 3,600 people, the Lebanese health ministry said.

The next US CPI reading, covering June 2026, is scheduled for release by the BLS on 14 July 2026. Whether Wednesday's fresh strikes delay or accelerate a deal with Iran will be a central variable in that figure.