[Economists Raise U.S. Inflation Expectations as War Delays Fed Rate Cut Timeline] Jin10 Data, May 22 – As the price shock triggered by the Iran war begins to spread from energy costs to broader sectors, economists have raised their forecasts for U.S. inflation and postponed the timeline for the Federal Reserve's next rate cut. They expect the core PCE index to rise more than previously anticipated, with both inflation indicators remaining above 3% by the end of this year. Regarding whether the Fed will cut rates in December, economists are evenly split, whereas previous surveys had predicted the next rate cut would occur in October. Wilmington Trust Corp Chief Economist Luke Tilley stated, "This familiar feeling is back again. The Fed and the market are worried that soaring energy prices will drive inflation, just as they were concerned last year that tariffs would lead to inflation." Considering that consumer spending is already relatively weak, people are more likely to offset higher gas station expenses by cutting back on other spending categories. Surveys show that economists still expect U.S. consumer spending and GDP to grow by about 2% this year, roughly in line with previous forecasts. "The probability of a recession occurring within the next 12 months has dropped to 25%." Additionally, economists have slightly raised their forecasts for U.S. employment growth this year but still expect the unemployment rate to peak at 4.5% in the third quarter.