WASHINGTON, May 26, 2023 (AFP) – The US inflation measure most closely watched by the Federal Reserve accelerated in April, official figures showed Friday, reversing a recent slowdown and raising the chance of another interest rate hike in June.
Fed Chair Jerome Powell has said the US central bank is taking a “data-dependent approach” to its next decision, where it will mull if another rate hike is needed to bring inflation back down to its long-term target of two percent.
The personal consumption expenditures (PCE) index rose 4.4 percent year-on-year in April, up from 4.2 percent a month earlier, the Commerce Department said in a statement.
It was the first rise in the annual figure since January, and came as a result of sharp annual increases in prices for services, food and goods.
Price rises also accelerated on a monthly basis, the Commerce Department said.
Inflation excluding volatile food and energy prices also accelerated last month to 4.7 percent.
Analysts have been closely watching speeches by members of the Fed’s rate-setting committee for clues on how they are interpreting the most recent economic data.
Some members of the Federal Open Markets Committee (FOMC), including Powell, have suggested rates may have risen far enough to bring inflation down, while others, like Dallas Fed president Lorie Logan, have indicated their preference for another rate hike at the next meeting in June.
Futures traders now see the most likely scenario being another interest-rate hike from the Fed on June 14, according to data from CME Group.