Consumer Spending Rises Amid Soaring Inflation Rates

WHO:

Bloomberg - Rob Sockin, Chief US Economist at PGIM Credit

Yahoo Finance - Bill Adams, chief US economist for Fifth Third Commercial Bank

Yahoo Finance - Kevin Warsh, Fed Chairman

Yahoo Finance - Joseph Brusuelas, chief economist at RSM

WHAT:

Bloomberg - US consumer spending accelerated in May.

Yahoo Finance - The Personal Consumption Expenditures (PCE) index rose 4.1% in May, up from 3.8% in April.

Yahoo Finance - Month-over-month inflation rose to 0.4% in May.

Yahoo Finance - Core PCE rose to 3.4% in May, up from 3.3% in April.

Yahoo Finance - Month-over-month core inflation rose to 0.3% in May, compared to 0.2% in April.

Yahoo Finance - Fed officials expect headline PCE to end the year at 3.6% and core PCE to end the year at 3.3%.

Yahoo Finance - A 38.8% decline in West Texas Intermediate oil prices from its May apex is noted.

WHERE:

Yahoo Finance - The Federal Reserve is based in the United States.

WHEN:

Yahoo Finance - The Fed is expected to meet in July.

Yahoo Finance - Fed officials project inflation to remain elevated through the year before moving back down next year.

WHY:

Bloomberg - The rise in consumer spending is occurring despite the fastest price increases in over three years, attributed to the fallout from the Iran war.

Yahoo Finance - Higher energy prices have contributed to overall inflation.

HOW:

Yahoo Finance - The Fed is likely to hold interest rates steady but may consider a rate hike if inflation does not dissipate.

(UPDATED June 25, 2026 17:47 UTC)

US consumer spending accelerated in May, with the Personal Consumption Expenditures index rising to 4.1%, up from 3.8% in April, while month-over-month inflation increased to 0.4%. The Federal Reserve, based in the United States, is expected to meet in July and officials project that headline PCE will end the year at 3.6% and core PCE at 3.3%. Despite the fastest price increases in over three years, attributed to the fallout from the Iran war and higher energy prices, the Fed is likely to hold interest rates steady, although they may consider a rate hike if inflation does not subside.