#USCorePCEMay $BNB 🔍 What the Numbers Say
Core PCE (Month-over-Month): +0.2% vs. +0.15% expected
Core PCE (Year-over-Year): +2.7%, up from +2.6% in April, beating expectations
Headline PCE: rose +0.1% MoM to +2.3% YoY, aligning with forecasts
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🧭 Why It Matters
The Core PCE is the Fed’s preferred inflation gauge because it excludes volatile food and energy prices.
A 2.7% YoY rise exceeds the Fed’s 2% target, signaling persistent inflationary pressures, even as headline inflation stays moderate.
The +0.2% monthly increase suggests inflation momentum remains stronger than expected.
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📉 Market & Fed Implications
**Federal Reserve policy:**
Elevated core inflation reduces pressure to cut rates in the near term. The odds of a rate cut in July have diminished. Markets now look to possible rate cuts in September if inflation cools .
Financial markets:
• The U.S. Dollar Index weakened post-report, with the DXY nearing its 97.00 support, reflecting investor recalibration .
• Treasury yields fell, and stock futures remained steady as markets weighed inflation versus weakening growth .
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📉 Broader Economic Context
**Consumer spending & income:**
Personal spending declined 0.1% MoM and incomes dropped by 0.4%, likely tied to reduced Social Security payments .
Trade uncertainties and tariffs are weighing on demand .
Growth signals:
These trends hint at potential economic slowing, though not enough to immediately sway Fed policy .
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🧩 Summary Snapshot
Indicator May 2025 April 2025 Market Expectation
Core PCE MoM +0.2% +0.2% +0.15%
Core PCE YoY +2.7% +2.6% +2.6%
Headline PCE YoY +2.3% +2.2% +2.3%
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✅ Bottom Line
Inflation remains sticky, especially when stripping out volatile sectors—core measures continue above the Fed’s comfort zone.
The Fed is unlikely to cut rates in July, but a September adjustment may still be in play.
Consumers are tightening, with falling income and spending reinforcing the narrative