#USCorePCEMay The USCorePCEMay data has arrived and the markets are paying close attention as it reflects the core personal consumption expenditures price index for the month of May which is the Federal Reserves preferred measure of inflation this data strips out the volatile food and energy components providing a clearer picture of underlying price trends in the economy in May the Core PCE rose modestly on a monthly basis suggesting that inflation pressures may be slowly cooling after a period of persistent price growth this gives the Fed more breathing room when it comes to interest rate decisions as they have been weighing the risks of inflation against the need to support economic growth with consumer spending showing signs of stability and the labor market remaining strong a softer Core PCE reading could shift expectations around the timing of future rate cuts financial analysts and traders are parsing the numbers closely as the Core PCE has significant implications for bond yields stock prices and the dollar a cooler than expected figure often results in a rally in equities and a dip in Treasury yields while a hotter reading tends to do the opposite as of now the May data points toward gradual disinflation and potential easing by the Federal Reserve later this year
