#PCEMarketWatch
๐ PCE Market Watch | May 31, 2025
The Core PCE Price Index, the Fedโs preferred inflation gauge, came in at +0.2% MoM and +2.7% YoY, matching expectations. Headline PCE rose 0.3% MoM, keeping annual inflation steady at 2.7%.
๐ง What it means:
Inflation remains sticky but stable. While we're seeing a gradual cooling in prices, itโs not enough to shift the Fedโs cautious stance just yet.
๐ฌ Market Reaction:
๐ Yields dipped slightly on the news.
๐ Stocks opened higher as investors weigh the odds of a rate cut later this year.
๐ต The dollar remained flat, signaling no major surprises.
๐ฎ Outlook:
With Core PCE holding, markets are still pricing in a potential Fed rate cut in Q4 2025, but it will depend on further softening in labor and price data.
Stay tuned โ June's CPI and FOMC meeting will be pivotal.
