Fed’s Goolsbee says inflation remains top concern as core PCE hits 3.4% in May

Federal Reserve officials Austan Goolsbee and John Williams said inflation remains well above the central bank’s 2% target, even as some services-price measures have shown modest improvement. Data showed core PCE inflation rose 3.4% year over year in May, its highest reading since October 2023, while headline PCE reached 4.1%, with higher energy prices during the recent Middle East conflict contributing to the increase, according to Reuters. They said the current policy stance remains appropriate and did not signal an imminent rate cut. Markets have priced in about a 30% chance of a rate increase at the Fed’s July 28-29 meeting.