What was the inflation rate in May according to the PCE index?

The PCE index rose 0.4% month-over-month and 4.1% year-over-year, while core PCE rose 0.3% monthly and 3.4% annually.

May PCE Inflation Rises to Highest Level Since 2023

Q: How might higher inflation affect Federal Reserve decisions?

Higher inflation may lead the Fed to keep interest rates elevated for longer, potentially impacting stock and bond markets.

The Personal Consumption Expenditures (PCE) price index rose 0.4% month-over-month and 4.1% year-over-year in May, marking the highest level since 2023. Core PCE, excluding food and energy, rose 0.3% monthly and 3.4% annually.

June 25, 2026

2 min read

Source: Yahoo Finance Video

Key Numbers

headline pce mom

0.4%

headline pce yoy

4.1%

core pce mom

0.3%

core pce yoy

3.4%

The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.4% month-over-month and 4.1% year-over-year in May, reaching its highest level since 2023. Core PCE, which excludes volatile food and energy prices, increased 0.3% monthly and 3.4% annually.

Details

The May data shows persistent inflationary pressures in the U.S. economy, with both headline and core readings exceeding expectations. The Fed closely watches core PCE as a measure of underlying inflation trends.

Context

This rise comes as investors closely monitor the Federal Reserve's next moves on interest rates. Fed officials have indicated they need to see more evidence of inflation cooling before cutting rates.

What It Means for Investors

Higher inflation data suggests the Fed may keep interest rates elevated for longer, potentially impacting equity valuations, especially in technology and growth sectors. It could also lead to increased volatility in bond and currency markets.

Frequently Asked Questions

The Personal Consumption Expenditures (PCE) price index is the Federal Reserve's preferred inflation gauge, measuring changes in prices of goods and services purchased by consumers.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.