vst]664nw2}7si1g58k[pyx)_media_dl_1.png Bloomberg survey of economists AArticle content(Bloomberg) — Economists raised their estimates for US inflation and said they expect only one Federal Reserve interest-rate cut this year amid elevated energy costs sparked by the Iran war.
Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe personal consumption expenditures price index is now seen rising 3.6% in the second quarter from a year earlier, according to Bloomberg’s April survey of economists. That compares with the 3.3% estimate in the March survey.
Article contentWe apologize, but this video has failed to load.Try refreshing your browser, or tap here to see other videos from our team.Article contentArticle contentForecasters also expect another metric that strips out food and energy costs to advance more than previously estimated, with both gauges remaining at or above 3% through the end of the year. They pushed out their forecasts for Fed rate cuts to October 2026 and March 2027.
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Article contentPresident Donald Trump has said a ceasefire that was set to expire would stay in place indefinitely while waiting for Iran to submit a unified peace proposal, but the Strait of Hormuz has remained essentially closed to shipping of oil and other goods with the US and Iran locked in a battle for control.
Article contentAnalysts warn energy prices will remain elevated even if there is a resolution to the hostilities soon because of the damage to energy production facilities and refining capacity incurred during the war.
Article content“The legacy effects of the war in Iran are going take months — not weeks — to unwind, with echo effects well into the second half of the year,” said Diane Swonk, chief economist at KPMG.
Article contentUS households are dealing with gasoline prices that have been hovering around $4 a gallon on average, and elevated diesel prices and supply disruptions have driven up input costs for US businesses.
Article contentThe survey showed consumer spending rising 1.9% this year, down slightly from the previous estimate. Gross domestic product is now expected to rise 2.2%, also slightly lower than previously forecast. The chance of a recession in the next 12 months was unchanged at 30%.
Article contentThe Bloomberg survey of 90 economists was conducted April 17-22.
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