The Fed's Preferred Inflation Metric Just Topped 4%. Here's What That Might Mean

Inflation continues to hit three-year highs, largely due to the Iran war.

The personal consumption expenditures (PCE) price index clocked inflation at a seasonally-adjusted 4.1% in May, the highest level since April 2023. That number, the headline year-over-year reading, came in line with economists' estimates.

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On a monthly basis, the PCE rose 0.4%, 10 basis points (0.1%) below consensus estimates.

Stripping out more volatile food and energy prices, core PCE in May came in 3.4% year over year and rose 0.3% from the prior month, both numbers that were in line with estimates.

"PCE price inflation remains too high and will keep the Fed on hold and ​mulling a potential rate hike at upcoming meetings," Scott Anderson, chief U.S. economist at BMO Capital Markets, said, according to Reuters. "Services inflation ... will not be easily tamed by falling energy prices. The fight between the hawks and the doves is sure ​

Fuente original: Yahoo Finance (https://finance.yahoo.com/economy/policy/articles/feds-preferred-inflation-metric-just-205901945.html)