In May, the annualized Personal Consumption Expenditure (PCE) rate in the United States exceeded 4%, with strong consumer spending.

Due to the impact of the Middle East conflict on energy prices, US inflation continued to rise in May, with the PCE annual rate exceeding 4% for the first time in three years. This may bring the Federal Reserve closer to raising interest rates this year. Data released by the US Department of Commerce on Thursday showed that the PCE price index in May increased by 4.1% year-on-year, the largest increase since April 2023, and the first time the data has surpassed 4.0%. The US-led war against Iran has pushed up oil prices, thereby raising gasoline prices. Although crude oil and gasoline prices have fallen somewhat in recent weeks with the fragile ceasefire agreement, economists expect inflation to remain high for a certain period. Prior to this conflict, consumers were already coping with price increases caused by the large-scale import tariffs imposed by former President Trump. Last week, the Federal Reserve kept interest rates unchanged at 3.50%-3.75%, but updated quarterly forecasts show that policymakers are increasingly concerned about inflation and expect to raise rates this year. The financial markets are betting that the earliest rate hike could be in September, with the possibility of another hike afterwards.