Economists have revised their U.S. inflation forecasts upward due to price shocks from the ongoing conflict in Iran, which have extended beyond energy costs. The core PCE index is now expected to rise more than previously anticipated, with inflation measures projected to remain above 3% by the end of the year. This has led to a shift in expectations regarding the Federal Reserve's next rate cut, with economists now divided on whether it will occur in December, as opposed to earlier predictions of October. Despite these inflation concerns, economists maintain that U.S. consumer spending and GDP will grow by approximately 2% this year, consistent with prior forecasts. The likelihood of a recession in the next 12 months has decreased to 25%. Additionally, while job growth forecasts have been slightly increased, the unemployment rate is still expected to peak at 4.5% in the third quarter.