What To Expect in the Markets This Week
How did the April PCE reading compare to the Federal Reserve's target?
The April PCE reading showed prices rose 2.7% year-over-year, which is ahead of the Federal Reserve's target of 2%.
What is the Personal Consumption Expenditures (PCE) index?
The Personal Consumption Expenditures (PCE) index is a measure of inflation in the United States, tracking changes in the prices of goods and services consumed by households. It is the Federal Reserve's preferred gauge of inflation, as it covers a broader range of spending and adjusts for changes in consumer behavior. The PCE index is calculated monthly by the Bureau of Economic Analysis and is used to monitor inflation trends and guide monetary policy decisions.
Why is the PCE index significant to the Federal Reserve?
The PCE index is significant to the Federal Reserve as it is their preferred measure of inflation. It tracks changes in the cost of living for households and provides a more comprehensive coverage of goods and services compared to other indices like the CPI. The PCE index helps the Fed make monetary policy decisions and set interest rates to meet their inflation target.