Live Coverage: Core PCE shows inflation continues falling, cheering markets

Core PCE came out at 0.1% MoM and 2.6% YoY, as expected. Inflation is falling. 

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Why Core PCE shakes markets

The core Personal Consumption Expenditures Price Index (core PCE) is the preferred gauge of inflation for the Federal Reserve (Fed) – the world’s most powerful central bank. It excludes volatile energy and food prices, which are set on global markets and have a limited impact by interest rates. 

After rising by only 0.2% in April, a smaller increase of 0.1% in May is expected. That yearly figure is set to rise by only 2.6%, also down from 2.8%, and closer to the Fed’s target of 2% YoY.

In case of aoft data, stocks and Gold would benefit, while the US Dollar would fall. A surprising increase in inflation would weigh on the precious metal and equities, while buoying the Greenback.

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