U.S. Core PCE Inflation Remains Muted, Below Expectations The U.S. Bureau of Economic Analysis reported that the core personal consumption expenditures (PCE) index, a measure of inflation excluding volatile food and energy prices, rose by only 0.1% in May. This was ниже the market expectation of a 0.1% increase. The headline PCE index, including food and energy, edged up by 0.2%, in line with expectations. However, the annual rate of inflation declined to 6.3% from 6.6% in April, indicating some moderation in price pressures. Key Takeaways: * Core PCE inflation remains stubbornly elevated but is tracking slightly below the Federal Reserve’s 2% target. * The slight increase in the headline PCE index suggests that inflationary pressures are still present but may be easing. * The Fed will likely continue to raise interest rates aggressively to tame inflation. Implications for the Economy and Markets: Persistent inflation poses challenges for the U.S. economy and the Fed’s monetary policy. High inflation erodes consumer purchasing power and can stifle economic growth. The Fed’s interest rate hikes are intended to slow demand and reduce inflation, although they may also lead to slower economic growth. Markets reacted modestly to the inflation data, with stocks and bonds showing little movement. Investors are closely monitoring inflation trends as they weigh the impact of rising interest rates on economic growth and corporate earnings. Outlook: The Fed is expected to raise interest rates by another 50 basis points at its July meeting. The pace and magnitude of future rate hikes will depend on the trajectory of inflation and the economy’s response to tighter monetary policy. Inflation remains a significant concern, but the latest core PCE data provide a glimmer of hope that price pressures may be starting to ease. The Fed’s monetary policy actions will be closely watched as it seeks to strike a balance between bringing inflation under control and preserving economic growth.The provided HTML code displays a combination of text and data points related to Personal Consumption Expenditures (PCE) in the United States. Here’s a summary of the key information:The provided HTML code displays a combination of text and data points related to Personal Consumption Expenditures (PCE) in the United States. Here’s a summary of the key information: PCE Data: * Year-over-year (YoY) core PCE (excluding food and energy) has fallen to its lowest level since March 2021, currently at +2.6% YoY. * Month-over-month (MoM) core PCE remains unchanged at +0.2%. * Overall PCE MoM is 0.0%, as expected. * Headline PCE YoY is +2.6%, in line with expectations. Other Data Points: * Personal income increased by +0.5%, slightly above the expected +0.4%. * Personal spending increased by +0.2%, below the expected +0.3%. * PCE services excluding energy increased by +0.1%, lower than the previous month’s +0.3%. Analysis: The author notes that the data is largely in line with estimates and that there are no major surprises in the headlines. The small variations and revisions in revenue and expenditure figures are not considered significant. The author also suggests that the Federal Reserve may view this report favorably as it provides further confirmation of the decline in CPI and relatively benign levels of core services inflation.The U.S. Core Personal Consumption Expenditures (PCE) Price Index, a key measure of inflation, rose by 0.1% in March, meeting market expectations. The PCE index, which excludes volatile food and energy prices, increased by 0.2% in February. The annual rate of core PCE inflation held steady at 5.2% in March, slightly above the Federal Reserve’s target of 2%. The core PCE index is closely watched by the Fed as it provides insights into underlying inflation trends. The latest data suggests that inflation remains elevated but may not be accelerating as rapidly as previously feared. Analysts noted that the increase in core PCE was driven by rising prices for goods such as vehicles and furniture. However, they also observed that price pressures for services, such as rent and healthcare, moderated somewhat. The Fed, which is currently raising interest rates to combat inflation, is expected to closely monitor the core PCE data in the coming months to determine the pace of further rate hikes.