US Inflation Rate Cools to 3.3%, Leaving Fed Rate Hike Uncertainty

The June 2026 PCE inflation report delivered a mixed but cautiously positive signal for financial markets as core PCE inflation eased to 3.3% year over year and monthly underlying price growth slowed more than expected.

However, inflation remained above the Federal Reserve's longer-term target of 2%, leaving investors uncertain about whether policymakers will hold interest rates steady or consider another rate hike later in 2026.

The core Personal Consumption Expenditures price index, which excludes food and energy categories, increased 0.1% month over month in June after rising 0.3% in May, representing the weakest monthly core reading in several months.