PCE Inflation Index Hits 3.8% in April, Fastest Pace Since May 2023, Strengthening Fed's Case for Rate Hikes
By
Colby Smith
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Summary
The Personal Consumption Expenditures (PCE) index, a key inflation measure watched by the Federal Reserve, accelerated to 3.8% in April — its fastest annual pace since May 2023. Core inflation (excluding food and energy) also hit a multiyear high. This reinforces the Fed's growing willingness to consider raising interest rates if price pressures persist, marking a potential shift in monetary policy to combat resurgent inflation.
Key quotes
· 3 pulledA measure of inflation closely watched by the Federal Reserve accelerated in April to a three-year high, reinforcing the central bank's budding support to consider raising interest rates if price pressures do not ease.
The Personal Consumption Expenditures index rose 3.8 percent from the same time last year. It was the fastest annual pace since May 2023.
A measure of underlying inflation that strips out volatile food and energy prices also notched a multiyear high.
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