Fed Officials Hold Rate Line After Core PCE Hits 3.4% in May
Updated
Updated · CNBC · Jun 25
Fed Officials Hold Rate Line After Core PCE Hits 3.4% in May
3 articles · Updated · CNBC · Jun 25
Summary
Core PCE inflation rose to 3.4% in May, the highest since October 2023, prompting Fed officials to stress inflation risks while signaling no near-term rate change.
Goolsbee said inflation is still "trending the wrong way" and the Fed's problem is clearly on the price side, even as he pointed to modest improvement in services inflation.
Williams struck a more optimistic tone, saying current policy is "well positioned" and forecasting inflation will ease as tariff effects fade, energy prices cool and shelter inflation slows.
Markets still see a possible September hike, while the Fed's next meeting is July 28-29 and traders assign about a 30% chance of a move then.
The comments also underscored Chairman Kevin Warsh's shift away from forward guidance, with Goolsbee backing shorter statements and less speculation about the rate path.