#FedPCEDataCameinLinewithExpectations

The inflation indicator most closely watched by the Fed in the US has been released: It came in line with expectations.

Core PCE, one of the inflation indicators most closely monitored by the US Federal Reserve (Fed), rose in May in line with expectations. The annual core PCE increase, reported at 3.3% in April, was announced as 3.4% for May.

Rising global oil prices due to the war have made core inflation indicators—which exclude energy and food costs—increasingly important. "Core Personal Consumption Expenditures (PCE)," a key inflation indicator for the Fed, rose as expected.

Highest level since October 2023...

Core PCE showed a 3.4% increase on an annual basis in May; the rate of increase in April had been 3.3%. The monthly increase was reported at 0.3%. The annual PCE increase marked the highest rate seen since October 2023. Meanwhile, headline PCE—which includes all prices—was reported at 4.1% on an annual basis; this figure was the highest recorded since April 2023.

While the Fed is known to place great importance on PCE data, core PCE—which presents a much more consistent picture over the long term—holds even greater significance in this regard.