- Faced with evidence of PCE inflation’s being above target for the month of April and evidence of an accelerating CPI from April to May, the FOMC is virtually certain to raise its target range for federal funds by another 50 basis points, as committee members have telegraphed.
- Clearly, the war in Ukraine has significantly impacted both food and energy prices, and this is reflected in the difference between the headline PCE and Core PCE.
- Overall, the US economy remains strong and should stand another rate increase by the FOMC without triggering a full-blown recession, the negative sentiment in US equity markets notwithstanding.
For further details see:
June FOMC