Fed's Favorite Inflation Reading Highlights Last Week of Q2
Friday June 28 will bring investors the May reading on the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, which should show prices on a "core" basis — which excludes food and energy — rose 0.1% last month
Friday June 28 will bring investors the May reading on the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, which should show prices on a "core" basis — which excludes food and energy — rose 0.1% last month. This would mark the slowest monthly rise since last November.
On an annual basis, core PCE inflation should jump 2.6%, the least since March 2021. Earlier this month, the Consumer Price Index (CPI) showed inflation continuing to cool, a report that bolstered investor bets the Federal Reserve would cut rates later this year. Fed forecasts released June 12 showed the central bank expects to cut rates at least once in 2024.
Meanwhile, the Federal Reserve signaled Wednesday it would lower interest rates just one time this year, down from the three cuts the central bank anticipated in its previous March projection.
Fed officials see the fed funds rate peaking at 5.1% in 2024. That suggests the Fed will cut rates by 0.25%. The Fed has moved in 25-basis-point increments over the last year or so, indicating the central bank expects to cut interest rates one time in 2024.
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U.S. economic activity seemed to soften in the past two months, with five of the Federal Reserve’s 12 regions reporting flat or declining activity, a Fed survey released Wednesday found.
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