PCE inflation preview: will we get any closer to 2%?

Key points
- The April PCE price index report will release Friday, May 31st at 8:30am EST
- Core PCE inflation YoY is expected to remain stable at 2.8%
- The US dollar stands to strengthen from persistent inflation, as the chances of a summer rate cut continue to dwindle
When does the April PCE report come out?
The April Personal Consumption Expenditures (PCE) report, a vital inflation measure, is scheduled for release on Friday at 8:30am EST. This report provides insights into inflation trends by detailing month-over-month and year-over-year rates. Although the Consumer Price Index (CPI) is more popular among the general public, the Federal Reserve favors PCE metrics for guiding monetary policy decisions. Analysts and traders rely heavily on this data to forecast interest rate moves, making it a focal point in financial market projections.
What to expect from April's PCE data
The upcoming release of the April PCE data is anticipated to mirror March's figures, with headline year-over-year inflation expected at 2.7% and core inflation at 2.8%. These consistent inflation rates would suggest stalling progress in what has otherwise been a successful stairstep lower towards the Fed's 2% goal. A reading lower than expected could inspire confidence that monetary policy could loosen in the near future, while an uptick may cause fear of an additional rate hike from the Fed to curb persistent inflation.
What does sticky inflation mean for US dollar?
How to trade US dollar
- Open an account to get started, or practice on a demo account
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- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
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