Svmuu News: Driven by rising energy prices resulting from the conflict in the Middle East, U.S. inflation continued to climb in May, with the annual PCE inflation rate surpassing the 4% threshold for the first time in three years—a development that could bring the Federal Reserve closer to raising interest rates this year.Data released Thursday by the U.S. Department of Commerce showed that the year-over-year U.S. PCE price index for May stood at 4.1%, marking the largest increase since April 2023 and the first time the figure has exceeded 4.0%. The U.S.-led war against Iran has driven up oil prices, which in turn has pushed up gasoline prices.
Although crude oil and gasoline prices have retreated in recent weeks following a fragile ceasefire agreement, economists expect inflation to remain elevated for some time. Even before this conflict, consumers were already grappling with rising prices triggered by Donald Trump’s sweeping import tariffs. Federal Reserve Last week, the Federal Reserve kept interest rates unchanged in the 3.50%–3.75% range, but updated quarterly forecasts indicate that policymakers, driven by growing concerns over inflation, expect to raise rates this year. Financial markets are betting on a rate hike as early as September, followed by a possible second hike. (Jin Shi)