As the US Federal Reserve, Federal Open Market Committee (FOMC) meets today to determine benchmark rates, alternative inflation measure Truflation is out with a report on what its data indicates.
Truflation’s June PCE forecast projects flat headline inflation of 0.0% month-on-month and 3.7% year-on-year.
Core PCE excludes food and energy and is forecasted to rise 0.2% month-on-month and 3.3% year-on-year, indicating ongoing inflationary pressures.
Key findings from Truflation’s June forecast include:
- Healthcare prices rose 0.26% month-on-month and 4.16% year-on-year
- Transportation services, including airlines, increased 0.84% month-on-month and 11.0% year-on-year
- Gasoline and energy goods prices fell 7.3% month-on-month, but strife in the Middle East means this could change quickly
- Softer prices in food services and accommodation, as well as furnishings and durable goods, helped. Clothing and footwear prices were broadly unchanged on the month but remained 4.97% higher year-on-year as tariff increases and higher import costs continued
Oliver Rust, Head of Data at Truflation, says core inflation remains above target, which supports maintaining rates, with the possibility of a rate increase in the future.
Expectations are for a decision not to change rates today, but, contingent on the data, an increase in September may occur.
