U.S. annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s.
expenditures price index increased 0.2% last month after edging up 0.1% in May, the Commerce Department said on Friday.
Excluding the volatile food and energy components, the PCE price index climbed 0.2% after increasing 0.3% in the prior month. That lowered the year-on-year increase in the so-called core PCE price index to 4.1%, the smallest advance since September 2021. The annual core PCE price index rose 4.6% in May.
Economists polled Reuters had forecast the core PCE price index gaining 0.2% and rising 4.2% year-on-year. The Fed tracks the PCE price indexes for its 2% inflation target.rate by 25 basis points to the 5.25%-5.50% range, a level last seen just prior to the 2007 housing market crash and which has not been consistently exceeded for about 22 years.
Slowing inflation and moderate consumer spending growth have increased the chances of the economy achieving the soft landing envisaged by policymakers.
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