Big Fed Inflation Reading Coming Friday: What to Expect

The Commerce Department will release a key inflation report Friday. The personal consumption expenditures (PCE) price index, a key measure for the Federal Reserve, is expected to show little to no increase for May, the first time since November 2023.

More importantly, the core PCE price index, excluding food and energy, is forecasted to have its lowest annual reading since March 2021, when it first exceeded the Fed's 2% target.

Despite declines from mid-2022 peaks, prices remain high, with core PCE up 14% since March 2021. Fed officials emphasize that returning to 2% inflation is ongoing. Rate cuts are expected this year, likely starting in September, depending on data.

Additionally, the Commerce Department will release personal income and consumer spending figures, expected to rise by 0.4% and 0.3%, respectively.