#USCorePCEMay

📊 U.S. Core PCE – May 2025 Update

– Headline: Core PCE inflation ticked up 0.2% MoM in May, pushing the YoY rate to 2.7%, above the 2.6% forecast .

– Energy & food excluded: This measure remains the Federal Reserve’s preferred inflation gauge.

– Headline PCE: Moderated at 0.1% MoM and 2.3% YoY .

👉 Market implications:

This hotter‑than‑expected core inflation reading could slow expectations of a July rate cut and support the Fed’s cautious stance .

Equities initially rallied—S&P 500 hit record highs—but Treasury yields retraced following the consumer spending slowdown .

🛍️ Consumer trends:

May saw a 0.1% drop in personal spending, marking the second monthly decline this year, with durable goods purchases notably weak .

Personal income edged down 0.4%, partly due to timing in Social Security payments .

🔍 What it all means:

Inflation remains slightly above the Fed’s 2% ideal, but weak consumer spending may temper any abrupt policy adjustments.

Fed likely to stay on hold—September remains key for possible rate easing. Markets are pricing in two cuts later this year .