{"id":19836,"date":"2025-06-27T19:19:15","date_gmt":"2025-06-27T19:19:15","guid":{"rendered":"https:\/\/www.europesays.com\/us\/19836\/"},"modified":"2025-06-27T19:19:15","modified_gmt":"2025-06-27T19:19:15","slug":"feds-preferred-inflation-gauge-shows-price-increases-accelerated-in-may","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/19836\/","title":{"rendered":"Fed’s preferred inflation gauge shows price increases accelerated in May"},"content":{"rendered":"\n

The latest reading of the Federal Reserve’s preferred inflation gauge showed price increases accelerated in May as inflation<\/a> remained above the Fed’s 2% target. The release comes as investors have been closely watching data releases for signs of when, or if, the Federal Reserve will cut interest rates this year.<\/p>\n

The “core” Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.7% on an annual basis, above the 2.6% economists had expected and higher than the 2.6% seen in April<\/a>. The April reading was revised higher to 2.6% from an originally reported 2.5% increase.<\/p>\n

Core prices rose 0.2% in May from the prior month, above the 0.1% economists had expected, which would have been in line with April’s increase.<\/p>\n

On a yearly basis, overall PCE increased by 2.3%, above the 2.2% increase from the month prior.<\/p>\n

Read more: How to protect your savings against inflation<\/a><\/p>\n

Elsewhere in the release, data showed signs of slowing economic growth activity. Real personal spending, which adjusts for inflation, decreased 0.3% in May after increasing 0.1% in April. Meanwhile, personal income fell 0.4% in May, well below the 0.7% increase seen in April and the 0.3% increase economists had expected.<\/p>\n

“The trend in parts of discretionary spending has weakened, and we expect a further slowdown in the coming months as tariffs begin to weigh on real disposable incomes,” Oxford Economics deputy chief US economist Michael Pearce wrote in a note to clients.<\/p>\n

The data’s release comes after Federal Reserve Chair Jerome Powell testified in front of House lawmakers, stressing<\/a> that the central bank is “well-positioned to wait” before moving interest rates.<\/p>\n

But debate over when the central bank will cut interest rates has been heating up. After Friday’s release, markets were pricing in a 22.7% chance the central bank cuts interest rates at its next meeting in late July, up from a 14.5% chance seen last week, per the CME FedWatch Tool<\/a>. Odds of a cut by the end of September had also surged, with markets now pricing in a 92% chance the central bank will have lowered rates by then, up from a 70% chance seen just a week ago.<\/p>\n

\"Federal Federal Reserve Board Chair Jerome Powell speaks during a hearing of the House Committee on Financial Services on Capitol Hill on June 24. (AP Photo\/Mark Schiefelbein) \u00b7 ASSOCIATED PRESS <\/p>\n

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer<\/a>.<\/p>\n

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