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Real-time News
Fed mouthpiece Nick Timiraos: Core PCE prices rose 0.24% in April. While this is the most modest month-over-month increase in the index over the past five months, it still stands at an annualized rate of 2.9%. The 3-month and 6-month annualized core PCE inflation rates are 3.8%, while the 12-month change is 3.3%.On May 28th, US consumer spending rose slightly in April, driven by soaring energy prices due to the situation in Iran, pushing annual inflation to its highest level since 2023. A report released Thursday by the US Bureau of Economic Analysis showed that inflation-adjusted consumer spending rose 0.1% last month, while the PCE price index rose 3.8% year-on-year. The core PCE index, excluding food and energy, rose 3.3% year-on-year. Another set of data showed that the US economy grew by 1.6% year-on-year in the first quarter, lower than the initial estimate due to downward revisions to inventory investment and consumer spending data. These inflation figures may further reinforce calls from a growing number of Federal Reserve officials that the Fed should signal that its next interest rate move may not necessarily be a rate cut. New Fed Chairman Warsh may need to work hard to convince his colleagues that raising interest rates is not always necessary to curb inflation expectations.May 28th - Initial jobless claims in the U.S. rose slightly, indicating continued stability in the labor market. According to data released by the Labor Department on Thursday, initial jobless claims increased by 5,000 in the week ending May 23, bringing the total to 215,000. A survey of economists showed a median forecast of 211,000. Continuing claims rose to 1.79 million. Despite the recent rebound in applications, the overall number of applications this year remains low; this contrasts with recent rounds of layoffs announced by several well-known companies—especially in the technology sector—primarily targeting white-collar positions.On May 28th, driven by rising energy prices due to the Iran war, U.S. inflation surged at its fastest pace in three years in April, further reinforcing economists view that the Federal Reserve is likely to keep interest rates unchanged for a long period until next year. The U.S. Bureau of Economic Analysis said Thursday that the PCE index jumped 3.8% in the 12 months ending in April, the largest increase since May 2023. The March PCE inflation rate, after revision, remained at 3.5%. Excluding volatile food and energy components, the core PCE price index rose 3.3% year-over-year in April, compared to a 3.2% increase in March. The Federal Reserve uses the PCE inflation indicator as a reference for its 2% inflation target. Financial markets expect the Fed to maintain its benchmark interest rate in the 3.50% to 3.75% range until 2027.EU High Representative for Foreign Affairs and Security Policy Karas: I think it is very important to promote dialogue between Ukraine and Russia.
