Yahoo Finance
The Federal Reserve's favored inflation gauge showed prices edged down in June, but remain uncomfortably above the central bank's 2% goal.
The Personal Consumption Expenditures Index rose 3.7%, in line with expectations, and down from 4.1% in May.
On a core basis, which excludes volatile food and energy prices, PCE clocked in at 3.3%, also in line with expectations and down a tenth of a percentage point from 3.4% in May.
Month over month, inflation cooled: Core PCE increased 0.1%, compared with expectations of 0.2% and down from 0.3% in May.
The data comes after the Consumer Price Index in June dropped to 2.6% on a core basis, from 2.9%, as a near 10% decline in gasoline prices helped pull headline inflation down to 3.5%, from 4.2%.
New York Fed President John Williams, the vice chair of the FOMC, said earlier this month that monthly readings of 0.2% or lower on core PCE would indicate inflation is dropping toward the Fed's 2% target, as the effects of tariffs wash out.
The implication is that the Fed wouldn't need to act.
But since these inflation readings, fighting between the US and Iran has reignited, pushing up energy prices, threatening to move inflation higher if sustained.
The Fed opted to hold rates steady on Wednesday, but Dallas Fed president Lorie Logan, Cleveland Fed president Beth Hammack and Minneapolis Fed president Neel Kashkari dissented, preferring to raise rates by a quarter percentage point.
The disagreement underscores how pressure is building inside the Fed to act to get a grip on inflation that has run above its target for more than five years.
Fed Chairman Kevin Warsh said Wednesday bond yields are materially higher, suggesting that was a good thing and implying that the Fed welcomes the higher yields.
The yield on the two-year Treasury, which closely tracks where investors expect the Fed's benchmark interest rate to move in the near term, remains around 4.25%, signaling two hikes.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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