Fed Officials Warn U.S. Inflation Risks Rising Amid Iran Conflict, PCE Hits 3.5% on May 7

According to BlockBeats, on May 7, multiple Federal Reserve officials warned that U.S. inflation risks are rising amid ongoing Iran conflict pushing oil prices and supply chain pressures. St. Louis Fed President Mussa llem stated policy risks have shifted toward higher inflation, with rates potentially needing to remain unchanged for an extended period and further increases possible if necessary. Chicago Fed President Goolsbee cautioned that sustained high oil prices over months could gradually impact global supply chains and potentially replicate pandemic-era inflation transmission.

U.S. gasoline prices have risen above $4.50 per gallon, while the New York Fed's Global Supply Chain Pressure Index reached its highest level since July 2022. Latest PCE data shows U.S. March inflation at 3.5% year-over-year, with core PCE rising to 3.2%, prompting Fed officials to increasingly accept the possibility of rate hikes if necessary.