The Fed’s preferred inflation measure shows signs of cooling
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The Federal Reserve's preferred measure of inflation continues to show signs of cooling, accompanied by moderate growth in consumer spending - welcome news for central bankers aiming to control rising prices and curb demand.
The personal consumption expenditures (PCE) index rose 2.6% year-over-year in May, in line with economists’ expectations and down slightly from a 2.7% gain in April. Excluding the more volatile prices of food and fuel, the “core” inflation measure also rose 2.6% year-over-year, down from 2.8% in April. On a monthly basis, inflation remained remarkably subdued, with overall prices not showing any significant increase.
The Federal Reserve is likely to scrutinize this new inflation data as it considers its next policy moves. Since 2022, ...