The U.S. Consumer Price Index jumped by 5% in the 12 months through May, marking the largest yearly increase since August 2008, and exceeding the 4.7% increase expected by economists. 

Core CPI, which excludes food and energy prices, rose 3.8% year-over-year, also higher than economists' expectations of a 3.5% increase. 

The figures, reported Thursday by the U.S. Labor Department's Bureau of Labor Statistics (BLS), shows an economy that’s working through supply constraints while trying to meet increasing demand as the country reopens, with business lockdowns ending and coronavirus vaccines reaching more people.

On a month-to-month basis, consumer prices rose 0.6% after increasing 0.8% in April, according to the report. Excluding food and energy, the index rose 0.7% on the month.

"Our U.S. economists are of the view (shared by the Fed’s leadership) that this current episode is likely to prove temporary thanks to one-off factors such as those associated with the economic reopening and base effects," Deutsche Bank wrote in a newsletter published on Thursday.

Deutsche Bank, however, also published a report on Monday issuing a stark warning that inflation could send the global economy into a recession as central banks lose control. The report was part of a research series highlighting risks to the firm's house view.

The CPI report is particularly important for some cryptocurrency investors who view bitcoin (BTC) as a hedge against inflation and currency debasement. 

Since most of 2020 saw inflation of about 1%, the Federal Reserve has yet to meet its target of seeing 2% inflation on average on an annual basis before it raises rates.