The Globe and Mail reports in its Friday edition that U.S. producer prices rose more than anticipated in May, marking the largest annual gain in 3-1/2 years, driven by higher energy costs due to the Iran war. A Reuters dispatch to The Globe reports that this, along with a resilient labour market and low layoffs, has led economists to expect the Federal Reserve to maintain interest rates until 2027 and to shift its easing stance at the upcoming policy meeting. U.S. producer prices rose more than anticipated in May. After oil prices retreated in recent weeks, economists had hoped inflation would peak in May. But oil prices have resumed their upward trend as a ceasefire frayed. President Donald Trump said on Thursday he was going to hit Iran "very hard," and then later said he had cancelled the plans, citing negotiations with Tehran. The government reported on Wednesday that consumer inflation jumped above 4 per cent in May for the first time in three years. "The Fed is clearly missing its inflation target by a lot more than it is missing its employment objective," said Brean Capital adviser John Ryding. "The PPI report should further embolden those on the FOMC who think a rate hike might be needed later in the year."