May US PCE inflation tops 4%, leaves Fed hike on the table

WASHINGTON, June 25 (Reuters) - U.S. inflation increased further in May, breaking above 4.0% for the first time in three years as the Middle East conflict boosted energy prices, and keeping an interest rate increase from the Federal Reserve this year on the table.

But with oil prices falling to pre-war levels on Thursday after the United States and Iran signed a preliminary peace deal, inflation likely peaked last ‌month or is close to doing so. An easing in gasoline prices is anticipated. The impact on inflation could, however, be offset by rising prices for technology goods like semiconductors and electronics amid an artificial intelligence ‌investment boom.

Fertilizer shortages because of the conflict were expected to raise food prices, economists said. Service prices, which increased strongly last month, were unlikely to abate quickly. Economists believed underlying inflation would remain elevated for a while. Financial markets are expecting a rate hike from the U.S. central bank in September.

"PCE ​price inflation remains too high and will keep the Fed on hold and mulling a potential rate hike at upcoming meetings," said Scott Anderson, chief U.S. economist at BMO Capital M

Fuente original: Yahoo Finance (https://finance.yahoo.com/economy/articles/us-pce-inflation-measure-tops-124005521.html)