The Globe and Mail reports in its Friday edition that U.S. inflation increased further in May, breaking above 4 per cent for the first time in three years as the Middle East conflict boosted energy prices, and potentially drawing the Federal Reserve closer to raising interest rates this year. A Reuters dispatch to The Globe says, however, with oil prices falling to prewar levels after the U.S. and Iran signed a preliminary peace deal, inflation likely peaked last month or is close to doing so. An easing in gasoline prices is expected. The impact on inflation could, however, be offset by rising prices for technology goods like semiconductors and electronics amid an artificial-intelligence investment boom. Fertilizer shortages because of the conflict were expected to raise food prices. Service prices, which increased strongly last month, were unlikely to abate quickly. Economists believed underlying inflation would remain elevated for a while. Financial markets are expecting a rate hike from the U.S. central bank in September. "PCE [personal consumption expenditures] price inflation remains too high and will keep the Fed on hold and mulling a potential rate hike at upcoming meetings," said BMO economist Scott Anderson.