#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