Inflation eased in May, with prices rising at the slowest pace since March 2021, according to the latest data from the Federal Reserve’s preferred inflation gauge.
The core personal consumption expenditures (PCE) index, which excludes food and energy costs and is closely watched by the Federal Reserve, rose 0.1% from the previous month in May, in line with Wall Street expectations but slower than April’s 0.3% increase.
Core PCE rose 2.6% year-on-year in May, in line with expectations. The May figure marked the slowest annual rate of increase in more than three years.
The report follows other encouraging inflation readings in May. The latest Consumer Price Index (CPI) showed core prices rose 0.2% from the previous month, below economists’ expectations.
But after inflation unexpectedly picked up earlier this year, Federal Reserve officials remain cautious about inflation trends, noting in their latest policy statement that it would not be appropriate to cut interest rates until they have “greater confidence” in the path of inflation.
“We have made further moderate progress toward our inflation goal,” Fed Chairman Jerome Powell said at a press conference on June 12. “We will need better data to increase our confidence that inflation is moving sustainably toward 2 percent.”
Josh Shaffer is a reporter for Yahoo Finance. Follow him on X Follow.
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