In June, the Personal Consumption Expenditures (PCE) index increased by +2.6% compared to the same period last year - higher than the forecast (2.5%) and last month (2.3%).

The core PCE index (excluding the volatile prices of food and energy) recorded an increase of +2.8% compared to the same period last year - higher than expectations (2.7%) but unchanged from last month.

Additionally, the PCE inflation for May was revised up from +2.3% to +2.4%. The core PCE inflation for May was also revised up from +2.7% to +2.8%.

👉The FED's preferred inflation measure is returning to an upward trend (increasing for 2 consecutive months and the highest since February 2025).

This data may make the FED's path to interest rate cuts more bumpy as Powell emphasizes the need for more evidence of a sustainable decline in inflation towards the 2% target.