Core PCE Index Slows to Six-Month Low, Balancing Inflation and Growth Concerns

The Federal Reserve’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, showed a slowdown in May, increasing by just 0.1% month-over-month. This deceleration, coupled with rebounding household spending and solid income growth, suggests that inflation might be cooling without significantly impacting consumer activity. This data supports the possibility of interest rate cuts later in the year and provides some reassurance to Fed officials amid recent signs of economic slowdown.