Fact Check: "Core prices surged 2.7% in May, exceeding the Federal Reserve's target."
What We Know
In May 2025, the core personal consumption expenditures (PCE) price index, which is the Federal Reserve's preferred measure for inflation, reported an annual increase of 2.7%. This figure is significant as it exceeds the Fed's target inflation rate of 2% and marks the 51st consecutive month in which core inflation has remained above this target (Forbes, Investopedia). The core PCE index excludes volatile categories such as food and energy, providing a clearer view of underlying inflation trends.
Economists had anticipated a core PCE inflation rate of 2.6% for May, making the actual figure of 2.7% higher than expected (NBC New York). This uptick in inflation is particularly relevant as it influences the Federal Reserve's monetary policy decisions, including discussions around interest rate adjustments (CBS News).
Analysis
The claim that "core prices surged 2.7% in May, exceeding the Federal Reserve's target" is supported by multiple credible sources. The Bureau of Economic Analysis reported that core PCE inflation rose to 2.7%, which is indeed above the Fed's target of 2% (Reuters, MSN). This data is crucial as it reflects the ongoing inflationary pressures in the economy, despite efforts by the Fed to maintain price stability.
The reliability of these sources is high. Reuters and Forbes are well-respected news organizations known for their financial reporting, and they base their information on official government data. The Bureau of Economic Analysis is a government agency that provides essential economic statistics, further validating the accuracy of the reported figures.
However, it is important to note that while the core PCE inflation rate has exceeded the Fed's target, it is still significantly lower than the 40-year high of nearly 6% recorded in 2022 (Forbes). This context is essential for understanding the current economic landscape and the Fed's cautious approach to monetary policy.
Conclusion
The claim that "core prices surged 2.7% in May, exceeding the Federal Reserve's target" is True. The data from credible sources confirms that the core PCE inflation rate indeed rose to 2.7%, surpassing the Federal Reserve's target of 2%. This increase reflects ongoing inflationary pressures that the Fed must consider in its monetary policy decisions.
Sources
- US reports benign PCE inflation in May
- Fed's preferred inflation gauge rose to 2.7% in May - MSN
- Core PCE Inflation Was 2.7% In May As Prices Still Under Pressure - Forbes
- The Fed's Preferred Inflation Gauge Was Slightly Higher Than Expected - Investopedia
- PCE report today shows U.S. inflation ticked higher in May as consumers - CBS News
- Core inflation rate rose to 2.7% in May, more than expected, Fed's - NBC New York
