U.S.-Iran Peace Deal Could Mark End of Inflation Spike, Economists Say

The U.S. and Iran are expected to sign a peace accord this week in Switzerland, potentially marking the end of war-driven inflation pressures, according to economists cited in reports. U.S. inflation spiked to 4.2% year-over-year in May—the fastest pace in over three years—with energy costs accounting for more than half the monthly increase. Analysts believe inflation may have already peaked, as crude oil prices have begun declining and retail gasoline prices have retreated from a May high of $4.56 per gallon to around $4.04 currently. Citigroup's chief U.S. economist Andrew Hollenhorst noted that "the direction is clearly downward" for energy markets. However, economists cautioned that normalizing shipping through the Strait of Hormuz and further price declines will take time, and consumers face uncertainty as supply-chain effects continue to ripple through the economy.
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