Dallas Fed Trimmed Mean Inflation Falls to 1.4% in June as 12-Month Rate Hits 2.2%
Updated
Updated · CNBC · Jul 31
Dallas Fed Trimmed Mean Inflation Falls to 1.4% in June as 12-Month Rate Hits 2.2%
3 articles · Updated · CNBC · Jul 31
Summary
The Dallas Fed’s trimmed mean PCE slowed to a 1.4% one-month annualized rate in June, down 1.3 percentage points from May and the lowest since November 2020.
Its 12-month rate eased to 2.2%—the lowest since July 2021—reinforcing signs that underlying inflation is moving closer to the Fed’s 2% goal even as headline gauges remain higher.
Commerce Department data showed overall PCE fell 0.1% in June on cheaper fuel, while core PCE rose 0.1%; on a yearly basis, the two measures were still 3.7% and 3.3%.
Markets may use the softer trimmed-mean trend to price out further rate hikes, but Dallas Fed President Lorie Logan warned the measure may currently understate true inflation because of compositional effects.
That caution matters as Chair Kevin Warsh reviews how the Fed gauges inflation and after Logan, Neel Kashkari and Beth Hammack dissented against holding rates steady, arguing inflation risks remain tilted upward.