#USCorePCEMay

Here’s a detailed breakdown of the May U.S. PCE (Personal Consumption Expenditures) report—the Federal Reserve’s preferred inflation gauge—due today, June 27, 2025, at 8:30 a.m. EDT:

🧾 Key Predictions (May 2025)

Headline PCE (month-over-month): +0.1%; year-over-year: ~2.3%

Core PCE (ex‑food/energy, MoM): +0.1%; YoY: near 2.6%

If realized, these would mark:

A third straight month of modest core inflation.

Headline at or near the Fed's 2% target range.

🔍 What This Means

1. Tariff Watch

Despite concerns that tariff hikes could soon push prices higher, current CPI and PPI data suggest no immediate surge—markets expect May's numbers to reflect that .

2. Rate-Cut Timing

If May’s PCE stays tame, recent signals from Fed officials (Waller, Bowman) could support rate cuts as early as July, though most analysts favor September .

Powell remains cautious, citing possible tariff-driven pressure in upcoming months .

3. Market Reaction

A “soft” print (<= 0.1% MoM) may reinforce the odds of a September cut, while a surprise higher reading could push back expectations and strengthen the dollar .

📊 Latest Data Snapshot

April Core PCE YoY: 2.5% (down from 2.7% in March)

Cleveland Fed nowcasting (as of June 26):

May Core PCE MoM: ~0.14%

YoY: ~2.58%

Here is the bar chart comparing the May 2025 forecast and April actual values for U.S. PCE metrics.