#USCorePCEMay

May Core PCE Update — Inflation Still Above Comfort Zone

Here’s what dropped today:

Headline PCE (what people pay) rose 0.1% MoM, making it up 2.3% YoY.

Core PCE (ex food/energy) ticked up 0.2% MoM, now 2.7% YoY — slightly hotter than expected

Why It Matters

Core PCE is the Fed’s top inflation guide—it’s still well above their 2% target. That’s why we’re seeing a pause on cutting rates

Meanwhile, consumer income dropped 0.4% and spending fell 0.1%, hinting at slower growth

What Comes Next

The mild inflation rise and cooling spending suggest the economy may be slowing—possibly edging toward a mild recession

Still, inflation staying above target means the Fed is unlikely to cut rates until at least September, maybe even later

My Take

Inflation is stubborn, but consumers are pulling back. That tells me we’re in a slow-growth environment. Watch upcoming inflation and spending data closely—those will drive the Fed’s next move.

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