PCE Inflation Rate Holds Steady at 3.7%

The US PCE inflation rate for June was announced at 3.7%, matching expectations.

The core PCE inflation rate, which excludes food and energy prices, came in at 3.3%, also as expected.

In contrast to the headline number, the core rate is lower than the headline rate, indicating that the rise in prices may be driven by specific sectors such as energy.

Fed Chair Warsh stated that the Fed is still targeting a 2% inflation goal and that 'inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.'

The transcript also highlighted that oil prices would need to decrease and stay low for inflation to return to the target level. If this does not happen, there is a risk of creeping inflation.