US May PCE Inflation Rises to 4.1%, Highest Since April 2023
The US May PCE inflation, the Fed's preferred metric, rose to 4.1% year-over-year, the highest since April 2023. Core PCE rose to 3.4%, its highest since October 2023, more than double the Fed's 2% target.
The US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) price index for May rose to 4.1% year-over-year, marking the highest reading since April 2023. This is the Federal Reserve's preferred inflation gauge.
Core PCE, which excludes volatile food and energy prices, increased to 3.4% annually, its highest level since October 2023. Both headline and core measures now stand at more than double the Fed's 2% inflation target.
The data reinforces expectations that the central bank will maintain a hawkish stance, potentially delaying any rate cuts. Markets reacted with heightened volatility as investors reassess the inflation outlook.
Source: The Kobeissi Letter