US PCE Inflation Cools to 3.7% in June, Confirming Disinflation

The US Personal Consumption Expenditures (PCE) Price Index declined 0.1% in June from the prior month, following a revised 0.5% increase in May. The annual inflation rate eased to 3.7%, down from 4.1% and matching consensus estimates.

The reading underscores a continued moderation in price pressures, supporting the view that the Federal Reserve's tightening cycle is having its intended effect. Core PCE, which strips out volatile food and energy costs, also showed signs of cooling.

Markets largely shrugged off the data, as the numbers aligned with expectations and did little to alter near-term rate outlooks. The dollar index held steady, while Treasury yields edged lower.