Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge shows
Core inflation rose to 3.4% and spending increased 0.3%, strengthening bets that the Federal Reserve will keep rates higher for longer.
- The Commerce Department reported annual inflation reached 4.1% in May, up from 3.8% the previous month and the highest level in three years, driven by high gas prices in the Personal Consumption Expenditures price index.
- Core inflation, which excludes volatile food and gas prices, rose to a 3.4% annual rate from 3.3% in the prior period, according to the latest Commerce Department data.
- Monthly PCE accelerated 0.4%, while core PCE rose 0.3%, both figures aligning with the Dow Jones consensus estimate for the monthly reading.
- Stronger-than-Expected inflation readings push the timeline for potential interest rate cuts further out, reinforcing The Federal Reserve's recent tough stance against persistent price pressures.
- Financial markets are currently pricing in the possibility of rate hikes later this year, despite President Donald Trump repeatedly pushing the Fed to cut rates.
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Washington. The United States recorded inflation of 4.1 percent per year in May, its highest level in three years, according to the PCE index, the preferred indicator by the Federal Reserve (Fed) to measure price pressure. This meter also rose sharply compared to April, when it stood at 3.8 percent.
Omaha World-Herald
Inflation gauge tops 4% for first time since 2023
WASHINGTON — U.S. inflation increased further in May, breaking above 4% 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.
The Fed's Preferred Inflation Metric Just Topped 4%. Here's What That Might Mean for Future Interest Rates
Key PointsThe personal consumption expenditures (PCE) price index is the inflation gauge the Federal Reserve pays most attention to.While inflation remains elevated, the PCE rose less than expected on a monthly basis.The market has now slightly changed its view on the trajectory of interest rates this year.10 stocks we like better than CME Group › Inflation continues to hit three-year highs, largely due to the Iran war.The personal consumption e…
Inflation Just Hit a 9-Month High: The Fed's Favorite Gauge Is Flashing Red Again
The post Inflation Just Hit a 9-Month High: The Fed’s Favorite Gauge Is Flashing Red Again appeared first on 24/7 Wall St.. Rick Santelli warns core PCE hit 3.4% in May, highest since October 2023, creating hawkish inflation backdrop that challenges Fed rate-cut expectations. Economy shows split: business investment and personal income accelerated while consumer spending fell to weakest level since Q1 2022, giving Fed conflicting signals. If …
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