#USCorePCEMay
๐ #USCorePCEMay Update!
U.S. Core PCE inflation rose 0.2% in May, pushing the annual rate to 2.7%, topping expectations of 2.6%โand exceeding Aprilโs 2.6% .
๐ Meanwhile, consumer spending dropped 0.1%, while personal income slid 0.4%, signaling frugal households .
๐จ **Why it matters:**
Core PCE is the Fed's preferred inflation gauge; this uptick dims hopes for a July rate cut .
Cautious consumer behavior and sticky inflation may keep rate cuts off the table this summer .
๐ Market reaction:
S&Pโฏ500 & Nasdaq hit new highs despite the data
Treasury yields softened amid easing economic activity concerns .
๐ Key takeaway:
Mayโs Core PCE above forecasts + cooling consumer trends = Fed likely to hold rates steady, eyeing more stability before making the first cut.
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Stay tuned! Will inflation ease enough to unlock those rate cuts later in 2025?