The Fed's preferred PCE inflation rate strengthens, 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 grew at its fastest pace in three years, further solidifying economists' views that the Federal Reserve may maintain interest rates unchanged for a long period until next year. The US Bureau of Economic Analysis said 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 a revised 3.5%. Excluding volatile food and energy components, the core PCE price index rose 3.3% year-on-year in April, compared to a 3.2% increase in March. The Federal Reserve uses the PCE inflation gauge as a reference for its 2% inflation target. Financial markets expect the Federal Reserve to maintain the benchmark interest rate in the range of 3.50% to 3.75% until 2027. (Jin Shi)