Financial markets are betting on a potential rate hike as early as September, with another possible increase to follow.

Odaily Odaily News: Driven by rising energy prices due to the Middle East conflict, U.S. inflation accelerated further in May, with the PCE annual rate breaking through the 4% threshold for the first time in three years. This could bring the Federal Reserve closer to raising interest rates this year. Data released by the U.S. Department of Commerce on Thursday showed that the U.S. May PCE price index recorded an annual rate of 4.1%, the largest increase since April 2023 and the first time the data has exceeded 4.0%. The U.S.-led war against Iran has pushed up oil prices, subsequently driving up gasoline prices.

Although crude oil and gasoline prices have fallen in recent weeks with the fragile ceasefire agreement, economists expect inflation to remain high for a certain period. Before this conflict, consumers were already dealing with rising prices caused by Trump's large-scale import tariffs. The Federal Reserve kept its interest rate unchanged in the 3.50%-3.75% range last week, but updated quarterly forecasts show that policymakers, due to heightened inflation concerns, expect to raise interest rates this year. Financial markets are betting on a potential rate hike as early as September, with another possible increase to follow. (Jin Shi)