By Ovunc Kutlu
ISTANBUL (AA) - The US Federal Reserve's preferred inflation indicator softened in May on both annual and monthly bases, according to Commerce Department figures released Friday.
The core personal consumption expenditures (PCE) price index monthly rose 2.6% in May, down from the 2.8% year-on-year gain in April, and came in line with market expectations.
On a monthly basis, the core PCE price index increased 0.1% in May, also slowing its pace from a 0.3% month-on-month increase in April, and came in line with market estimates.
The PCE price index, which includes food and energy prices, annually rose 2.6% in May, after a 2.7% annual gain in April, also coming in line with market expectations.
That index, on a monthly basis, remained unchanged in May, following a 0.3% monthly increase in April, and also in line with estimates.
The slowing figures indicate that the pace of inflation is decelerating in the world's biggest economy, and the Fed could start lowering interest rates as early as September.
The Fed has made a total of 11 interest rate increases between March 2022 and July 2023 to tame the record inflation, carrying the federal funds rate to the 5.25%-5.5% target range – the highest in 22 years.
The central bank skipped four rate hikes last year, and four more this year, while its first rate cut is widely expected to happen in the second half of this year.