The United States Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, indicated further moderation in inflation for June 2026. The headline PCE index declined by 0.1% month-over-month, following a revised 0.5% increase in May, and the annual rate eased to 3.7% from 4.1%, matching market expectations according to both the US Bureau of Economic Analysis and the Commerce Department [1][2]. Core PCE, which excludes volatile food and energy prices, rose by 0.1% month-over-month after a 0.3% increase in May, and the annual core rate eased to 3.3% from 3.4%, also in line with consensus estimates [1][2]. Notably, the monthly core figure was cooler than the 0.2% predicted by economists polled by LSEG [2].
Goods prices increased by 3% year-over-year in June and 0.7% month-over-month, while services prices rose 2.3% annually and 0.3% monthly [2]. The personal savings rate as a percentage of disposable personal income was 2.7% in June, down from 2.8% in May, and has declined from a peak of 5.5% in April 2025, starting 2026 at 4.4% [2].
Market reaction to the PCE data was muted, with the US Dollar Index (DXY) last seen down around 0.17% on the day, trading near 100.65 [1]. Analysts and traders noted that the data confirmed the ongoing disinflation process in the US, with no major surprises for financial markets, leaving expectations for the Federal Reserve's monetary policy path largely unchanged [1].
Federal Reserve policymakers remain focused on both headline and core PCE figures as they aim to bring inflation back to their long-run target of 2%, viewing core data as a better indicator of underlying inflation pressures [2].
CONCLUSION
June's PCE inflation data confirmed continued disinflation in the US, with both headline and core figures aligning with market expectations and showing a cooling trend. The muted market reaction and unchanged Fed policy expectations suggest that the data did not surprise investors. The ongoing moderation in inflation supports the view that the Fed's efforts are gradually bringing price growth closer to target.