Topline
The Federal Reserve’s preferred inflation reading rose at its fastest rate in nearly three years in May, according to federal data published Thursday, as markets all but guarantee an interest rate hike from the central bank by the end of the year.
Traders anticipate the central bank hiking interest rates amid high inflation.
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Key Facts
Annual inflation was 3.4% in May, up from 3.3% in April and the highest annual rate since October 2023 (3.5%), according to core consumption expenditures index data reported Thursday by the Bureau of Economic Analysis.
That surpassed consensus analyst estimates of inflation settling at 3.3%, according to FactSet, and remaining well above the Federal Reserve’s 2% target rate.
Headline PCE was 4.1% in May, matching economist projections after rising from 3.8% in April.
Central bank officials favor core PCE data over Consumer Price Index reports because it allows policymakers to better understand how Americans spend their money and how their spending habits shift over time.
This is a developing story.