#USCorePCEMay 🔢 Projected Data – May/2025

• Monthly Core PCE (MoM): +0.1% (equivalent to April)

• Annual Core PCE (YoY): +2.6%, a slight increase from +2.5% in April  

• Annual Headline PCE: ~+2.3%, up from 2.1% ()

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🏦 Significance to the Fed

• This is the Federal Reserve's favorite inflation indicator.

• The number has slightly increased but is still at a low level, reflecting that inflation remains under control .

• This data reinforces expectations of the Fed being more “dovish” – possibly starting to cut interest rates in September, with some officials (Waller, Bowman) even mentioning the possibility of an early cut in July if inflation continues to remain low .

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📈 Market Impact

• The USD tends to weaken as inflation cools and the Fed may loosen its policy.

• EUR/USD has been rising consecutively, currently around the 1.1750 – 1.1800 range, targeting 1.20 if Core PCE continues at +0.1% monthly and +2.6% annually .

• US stocks (S&P 500) have reached a high and are heavily dependent on PCE data to shape inflation and interest rate expectations ().