---
title: "Economists Adjust U.S. Inflation Forecast Amid Iran Conflict"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/287350018.md"
description: "Economists have raised U.S. inflation forecasts due to price shocks from the Iran conflict, predicting the core PCE index will exceed 3% by year-end. Opinions on a potential Federal Reserve interest rate cut in December are mixed. Despite weak consumer spending, GDP growth is expected at 2%, with a reduced recession probability of 25%. Employment growth forecasts have been slightly increased, but the unemployment rate is anticipated to peak at 4.5% in Q3."
datetime: "2026-05-22T10:51:58.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/287350018.md)
  - [en](https://longbridge.com/en/news/287350018.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/287350018.md)
---

# Economists Adjust U.S. Inflation Forecast Amid Iran Conflict

Economists have revised their U.S. inflation forecasts upward due to the price shocks stemming from the Iran conflict, which are now affecting broader sectors beyond energy costs. According to Jin10, they anticipate that the core PCE index will rise more than previously expected, with both inflation indicators remaining above 3% by the end of this year. Opinions are divided on whether the Federal Reserve will cut interest rates in December, with previous surveys predicting a rate cut in October. Luke Tilley, Chief Economist at Wilmington Trust Corp, noted that the current situation is reminiscent of past concerns about tariffs causing inflation, as the Fed and markets now worry about rising energy prices leading to inflation. Given the already weak consumer spending, people are likely to compensate for higher fuel costs by reducing spending in other areas. The survey indicates that economists still expect U.S. consumer spending and GDP to grow by about 2% this year, consistent with earlier forecasts. The probability of a recession occurring within the next 12 months has decreased to 25%. Additionally, economists have slightly increased their employment growth forecasts for this year, although they still expect the unemployment rate to peak at 4.5% in the third quarter.

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