The Fed's preferred PCE inflation rate strengthened, and it may continue to hold steady in the future

Odaily Planet Daily News Driven by rising energy prices due to the Iran war, the US inflation rate in April recorded its fastest growth in three years, further solidifying economists' view that the Fed may maintain interest rates unchanged for a long period until next year. The US Bureau of Economic Analysis said on Thursday that the PCE index surged 3.8% in the 12 months through April, the largest increase since May 2023.

The PCE inflation rate for March remained at 3.5% after revision. Excluding volatile food and energy components, the core PCE price index in April rose 3.3% year-on-year, compared with a 3.2% increase in March. The Fed uses the PCE inflation indicator as a reference for its 2% inflation target. Financial markets expect the Fed to keep the benchmark interest rate in the range of 3.50% to 3.75% until 2027. (Jin Shi)