The Personal Consumption Expenditure (PCE) Index, a US inflation indicator closely followed by the Federal Reserve, rose by a relatively modest 3% in the year to June, according to data on Friday that showed further progress in the central bank's efforts of fighting price growth with high interest rates
WASHINGTON (Pakistan Point News / Sputnik - 28th July, 2023) The Personal Consumption Expenditure (PCE) Index, a US inflation indicator closely followed by the Federal Reserve, rose by a relatively modest 3% in the year to June, according to data on Friday that showed further progress in the central bank's efforts of fighting price growth with high interest rates.
The growth in the PCE Index was precisely as forecast by economists polled by US media. It also matched the June annual growth of 3% in the Consumer Price Index (CPI), which serves as a broader measure of inflation. In comparison to June, the PCE Index grew by 3.8% in May.
Inflation has retreated significantly in the United States after the Fed resorted over the past 18 months to one of the most aggressive monetary tightening in its history to curb runaway inflation caused by the coronavirus pandemic and the trillions of dollars of relief spending related to that.
Since March 2020, the central bank has added a total of 5.25% to key lending rates which previously stood at just 0.25%. As a result, inflation measured by the CPI, has tumbled from an annualized four-decade high of 9.1% in June 2022 to just 3% per annum last month.
