All articles tagged with #core inflation
US producer prices rose 4.7% year over year in July, down from 5.5% in June and topping economists' 4.9% forecast; core PPI rose 0.2% in July to 4.2%, the lowest in four months, while energy prices have cooled after earlier spikes driven by geopolitical tensions, signaling easing but still-elevated wholesale price pressures.
Prediction markets on Kalshi imply July's CPI may come in cooler than the Dow Jones consensus, with under 55% odds of year-over-year CPI above 3.3% and just 15% above 3.4%. For core inflation, Kalshi traders put a 47% chance of more than 2.4% and 11% for more than 2.5%, while economists expect 3%? 2.5% YoY core inflation for July (down from June's 2.6%). The Bureau of Labor Statistics will release the CPI on Wednesday, a key data point for Fed rate decisions. CNBC notes the relationship and disclosure of Kalshi/CNBC collaboration.
Fed Governor Christopher Waller said the Fed may need to raise rates in the near term if upcoming inflation data keep core inflation well above the 2% target, stressing that another hot reading would be treated as a signal to tighten due to broad-based core-service inflation and anchored expectations; markets price a meaningful chance of a July or September move, underscoring the data-driven crossroads facing policy makers.
Even if June consumer prices dip thanks to cheaper gas, the broader inflation picture remains stubborn. Core inflation, driven by services and wages, has stayed elevated, and tariffs plus AI-related spending—data-center power, memory chips, and software—are pushing costs higher. Housing inflation has cooled only slowly, while war-related demand and disrupted supply chains could sustain price pressures for years, making a quick return to normal inflation unlikely and leaving the Fed far from its 2% target for the foreseeable future.
The Fed’s preferred inflation gauge, the PCE index, rose 4.1% in May (year over year) and 0.4% month over month, with core PCE up 3.4% year over year and 0.3% month over month, signaling persistent price pressures and keeping the door open for a rate increase within the next 12 months, according to economists who differ on the path ahead.
The May 2026 PCE report shows the Fed’s preferred core inflation at 3.4% year-over-year (up 0.3% for May) and all-items inflation at 4.1% (up 0.4% for the month), with consumer spending rising 0.7% and personal income up 0.7%. GDP grew at a 2.1% annualized rate in Q1, while initial jobless claims fell to 215,000. The data underscore persistent inflation pressures even as growth remains solid, reinforcing the Fed’s cautious-to-hawkish stance on policy.
Inflation rose in April, with the Fed’s preferred PCE price index up 3.8% year over year—the fastest since May 2023—and core inflation at 3.3%; monthly gains were 0.4% overall and 0.2% excluding food and energy. The war in Iran has disrupted energy markets, complicating price pressures and prompting more Fed officials to consider rate hikes to tame inflation, even as growth was revised downward and consumer spending cooled. The Fed’s leadership transition to Kevin Warsh adds to expectations that policy could tighten next year.
April’s core PCE rose 0.2% to 3.3% year over year, with the broader PCE up 0.4% to 3.8%, while Q1 GDP was revised to 1.6% annualized and consumer spending rose 0.5% in April. The data suggest inflation remains elevated but cooling, keeping the Fed on hold for now, with markets pricing potential rate moves in early next year.
March CPI rose 0.9% to 3.3% year over year, led by a 21.2% spike in gasoline and a 10.9% jump in energy from the Iran conflict; core CPI gained 0.2% for the month and 2.6% annually, signaling contained underlying inflation, with pockets of price declines in medical care, personal care, and used cars. Services excluding energy rose 0.2% and shelter 0.3%. Energy pressures eased in April after a U.S.–Iran cease-fire, and markets expect the Fed to remain patient while watching the broader inflation path toward its target.
February core PCE rose 3% and headline inflation 2.8%, while consumer spending fell 0.1% and personal income rose 0.4%. GDP for Q4 was revised down to 0.5% growth (down from 0.7%), driven by weaker investment and lower real final sales. The report suggests stagflation pressures even before the Iran conflict boosts energy prices, with Fed officials expected to keep rates on hold as inflation remains above target.
Eurozone inflation slowed to 1.7% in January per Eurostat flash data, with core inflation at 2.2%. The readings support the ECB keeping its 2% policy rate steady for now, with little chance of near-term cuts, though some analysts warn policy could shift if risks evolve, including a possible hike later (potentially in 2027).
U.S. Treasuries rallied after December's core inflation rose 0.2% month-on-month and 2.6% year-on-year, slightly below expectations, driving the 10-year yield down to about 4.175% (hit 4.156% intraday) while the 2-year slid to roughly 3.528% and the 30-year to 4.832%. Markets price in two 25-basis-point Fed cuts this year beginning in June as inflation trends decline and the labor market slows, though larger policy moves depend on ongoing data and the DOJ investigation into Powell’s renovations, which he says could influence the central bank’s decisions.
Inflation unexpectedly slowed in November with the consumer price index rising 2.7% annually, and core inflation at 2.6%, but analysts warn that data gaps prevent declaring victory for the White House.
The US inflation gauge remained steady in July at 2.6%, with core inflation slightly rising to 2.9%, indicating persistent inflation above the Fed's 2% target. Consumer spending increased significantly, and incomes rose, supporting the likelihood of a rate cut by the Fed next month, despite political pressure from President Trump to lower interest rates.
Core inflation in the US rose to 2.9% in July, the highest since February, driven by service prices and a slight increase in overall inflation, prompting expectations of potential interest rate cuts by the Federal Reserve amid mixed signals from the labor market and consumer spending.