May PCE inflation hit 4.1%, keeping pressure on the Fed

May inflation stayed above the Fed’s target. The Bureau of Economic Analysis said the PCE price index rose 0.4% in May and 4.1% from a year earlier. Core PCE, which strips out food and energy, rose 0.3% from April and 3.4% over the past 12 months.

Income and spending also moved higher. BEA said personal income, disposable personal income, and personal consumption expenditures each increased 0.7% in May, while real PCE rose 0.3%. That suggests households kept buying even as price pressure remained sticky.

The Federal Reserve kept its target range at 3.5% to 3.75% on June 17 and said inflation remains elevated relative to its 2% goal, in part reflecting supply shocks that have driven price increases in sectors including energy.

For households, the practical message is simple: prices are easing only slowly. The next BEA PCE release is scheduled for July 30, 2026, and it will show whether May was a one-month bump or part of a longer stretch of stubborn inflation.

Sources

• BEA — Personal Income and Outlays, May 2026
• Federal Reserve — FOMC statement, June 17, 2026
• Associated Press — May PCE inflation report