Oil shock raises headline PCE inflation forecast by 1.47 percentage points
Headline PCE inflation could rise by up to 1.47 percentage points this year if a prolonged oil shock occurs. This pressure comes as the U.S. Energy Information Administration raised its 2026 average WTI oil forecast by 22% to $96/bbl and its gasoline outlook by 10.6% to $3.70/gallon. The energy shock is tied to a deadline set by President Donald Trump for Iran to end its blockade of Gulf oil by 8 p.m. ET. Iran has cut off direct diplomacy with the U.S.
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