PCE Price Index Cools Down in June, Raising Hopes of Inflation Easing

The Federal Reserve's preferred inflation measure, the PCE price index, cooled down in June. The cost of living rose 3.7% over 12 months, down from a 4.1% annual increase in May.

This slowdown aligns with other data, such as the Consumer Price Index, which also showed cooling in June. Core PCE prices, excluding food and energy, ticked down slightly at 3.3% annually, above the Fed's 2% target.

The inflation decrease is attributed to a lull in the Iran war, causing gasoline prices to fall. This reduction had a ripple effect on overall inflation, bringing it back in line with forecasters' expectations.