The US PCE price index rose 0.4% month-over-month in May 2026, matching April's increase and less than market expectations of a 0.5% advance. Goods inflation eased to 0.4% from 0.7%, while services inflation rose to 0.5% from 0.3% in each of the previous two months. The core PCE index, which excludes food and energy, increased 0.3%, the same as an upwardly revised 0.3% in the previous month and matching market forecasts. On an annual basis, headline PCE inflation accelerated for a third consecutive month to 4.1% from 3.8%, confirming expectations and marking the highest level since April 2023. Core PCE inflation edged up to 3.4% from 3.3%, also in line with forecasts and reaching its highest level since October 2023. At its June 2026 meeting, the Federal Reserve raised its inflation forecasts, projecting PCE inflation at 3.6% and core PCE inflation at 3.3% for the year, both remaining well above the central bank's 2% target.