US PCE Inflation Eases to 3.7% in June, Core at 3.3%
The Fed's preferred inflation measure, the PCE price index, rose 3.7% year-over-year in June, in line with market expectations. Core PCE, which strips out food and energy, came in at 3.3%, the second-highest reading since October 2024.
Headline PCE inflation declined from the prior month to 3.7%, matching consensus forecasts. The core measure, which the Federal Reserve watches closely for underlying price trends, dropped to 3.3%.
Despite the modest cooling, both headline and core inflation remain roughly double the central bank’s 2% target. The persistence of elevated price pressures may reinforce expectations that the Fed will keep monetary policy restrictive in the near term.
Source: The Kobeissi Letter