WASHINGTON (AP) — Rising gas prices pushed inflation to its highest level in three years last month, a headache for the Federal Reserve and a potential political challenge for the Trump administration as midterm elections near.

Consumer prices rose 4.2% in May from a year earlier, the Labor Department said Wednesday, up from 3.8% in April and the third straight monthly increase. On a monthly basis, prices rose 0.5% last month, after big gains of 0.6% in April and 0.9% in March.

Prices have now risen faster than wages for several months, pressuring many Americans’ finances and causing consumers to take a decidedly dim view of the economy. Families are dipping into savings to maintain their spending, and more people are falling behind on their credit card bills. Large retailers say they have also noticed changes in customer behavior, like buying smaller amounts of gas during visits to the pump.

Inflation is now well above the Federal Reserve’s 2% target, which it has surpassed for more than five years. New Fed chair Kevin Warsh will preside over his first policy meeting next week, when the central bank is expected to keep its key interest rate unchanged. But the Fed is also likely to change the statement it issues after each meeting to remove a suggestion that its next move could be to lower rates. With inflation proving stubborn, financial markets expect the Fed could instead raise rates by the end of the year.

When the Fed lifts rates, over time it can make mortgages, auto loans, and business borrowing more expensive.

Outside energy costs, price increases last month were not as dramatic, a sign that sharply higher inflation hasn’t yet spread throughout the economy. Should the Iran war end and oil and gas prices decline, headline inflation could begin to cool. Gas prices have fallen this month, though they remain elevated.

Excluding the volatile food and energy categories, core prices rose at a more modest pace. On a monthly basis, they climbed just 0.2%, down from a 0.4% gain in April. Compared with a year ago, they have rise 2.9%, up from 2.8% in April.