US PCE Price index dropped to 2.6% confirming downward trend in inflation

28.06.24

PCE Price data shows that price’s rate of growth has resumed sliding down with 2.6% year over year in May after two month of sticking to 2.7%.
And it is a positive signal for Fed to start cutting rates somewhere later this year when, hopefully, the target of 2% is at least reached, if at all.
For now market expects the rates could be cut in September with around 60% chance which is, however, still just not far from 50%.
As inflation getting closer to 2% target any signals from macro data will be carefully examined by the Fed to decide on the timing of the first cut.
One of the major threats to starting easing policy, however, remains labor market which is still rather strong and therefore posing significant inflationary risk to the economy.