#USCorePCEMay

Here are the official U.S. Core PCE (Personal Consumption Expenditures Price Index excluding food & energy) figures for May 2025, released today (June 27):

• Monthly change: Core PCE rose 0.2% in May, up from 0.1% in April .

• Year-over-year change: Core PCE is now at +2.7% YoY, compared to +2.6% in April ().

⸻

📊 Headline PCE vs. Core PCE

• Headline PCE (including food & energy):

• May saw a +0.1% MoM increase and +2.3% YoY (up from 2.2% in April) .

⸻

💡 Why it matters:

• The Core PCE is the Federal Reserve’s preferred gauge of inflation—it excludes volatile components and is used to evaluate long-term inflation trends .

• May’s 0.2% MoM leap (versus the expected 0.1%) and 2.7% YoY level are slightly hotter than anticipated, signaling ongoing inflationary pressure .

• These readings may delay the Fed’s rate cut decisions, with market expectations for a July cut cooling—they now see a higher likelihood of a cut in September rather than earlier .

⸻

🧭 Market & Policy Outlook:

• Following the release:

• U.S. dollar weakened slightly.

• Equity markets (S&P 500, Nasdaq) hit record highs as investors continue pricing in rate cuts later this year .

• The Fed has maintained a “wait and see” approach, monitoring how inflation evolves, especially amid trade policy uncertainties .