#USCorePCEMay

The May reading of the Core PCE, a key indicator of core inflation, was released on June 27 with a 0.1% monthly increase and a year-on-year advance of 2.6%.

This represents a slight decline from the 2.7% annual rate in April, suggesting a gradual easing of core inflationary pressure.

This encouraging signal fuels the narrative about possible rate cuts by the Fed, with markets expecting the first in September, although analysts open the door to an option in July if no rebound is observed.

However, Fed Chair Powell and other members maintain a cautious stance regarding the effects of tariffs, which could materialize in the coming months.

Summary key points:

Core inflation remains moderate, around 2.6% annually.

Supports expectations of at least two cuts in 2025, with caution regarding inflationary risks.

The Fed insists on maintaining flexibility and relying on new data before taking action.