The Fed's preferred inflation gauge shows prices rising at fastest pace in 3 years

TL;DR

The PCE index rose 4.1% annually in May, a three-year high, with core PCE up 3.4%.
The Iran war contributed to rising oil and gasoline prices, impacting consumer fuel costs.
Analysts anticipate inflation may peak due to falling crude oil prices after the Strait of Hormuz situation eased.
Consumer spending and incomes rose in real terms, supported by tax refunds and stock market gains.
The Fed is committed to lowering inflation to 2% but held interest rates steady, leaving room for future hikes.
Higher prices are also attributed to the AI buildout affecting computer components and increased service costs like restaurant meals and healthcare.
Stronger GDP growth and falling energy prices might lead the Fed to maintain current interest rates.
The Fed is expected to keep rates steady until conditions allow for a cut.

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