April’s Core PCE: Inflation Stays Tame, Markets Watch for Fed’s Next Move
Updated: May 30, 2025 18:31
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The US Core Personal Consumption Expenditures (PCE) Price Index rose 0.1% month-over-month in April, matching March’s increase. On a year-over-year basis, core PCE inflation eased slightly to 2.5% from 2.6%, reflecting a gradual cooling in price pressures.
Key Highlights:
Inflation Moderation: The headline PCE inflation also declined to 2.2% YoY, reinforcing expectations of gradual disinflation.
Federal Reserve’s Stance: The Fed is expected to hold rates steady in June, with markets pricing in a 25% probability of a rate cut in July.
Market Reaction: Investors are closely watching the Fed’s next move, as policymakers assess the impact of tariffs and economic uncertainty on inflation.
Consumer Spending Trends:Personal spending is expected to normalize after a 0.7% surge in March, which was driven by front-loaded purchases.
With inflation showing signs of stability, analysts anticipate cautious monetary policy adjustments in the coming months.
Sources: FXStreet, Business Times, US Bureau of Economic Analysis.