Pce Price Index Shows High Inflation Despite Fed Rate Hikes

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Core Inflation Rate Rises to 5.1% in May, Highest Level in Decades

PCE Price Index Shows High Inflation Despite Fed Rate Hikes

Personal Consumption Expenditures Excluding Food and Energy Surges

The core personal consumption expenditures (PCE) price index, excluding food and energy, rose to 5.1% in May, the highest level since 1983, according to data released by the Bureau of Economic Analysis. This marks a significant increase from the 4.9% reported in April and is the eighth consecutive month that core inflation has exceeded the Federal Reserve's target of 2%.

The core PCE price index is the Fed's preferred inflation measure as it excludes volatile food and energy prices, which can fluctuate rapidly. The latest data suggests that inflationary pressures remain strong in the economy, despite the Fed's efforts to curb them through interest rate hikes.

The Fed has raised interest rates three times this year, with another hike expected in June. However, it is unclear whether these measures will be sufficient to bring inflation back to the target of 2%. If core inflation continues to rise, the Fed may need to consider more aggressive tightening of monetary policy.

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