The PCE inflation rate favored by the Fed has strengthened, and it may continue to remain unchanged in the future.

Driven by the increase in energy prices due to the Iran war, the inflation rate in the United States in April hit the fastest pace in three years, further solidifying economists' views that the Federal Reserve may keep interest rates unchanged for a long time before next year. The U.S. Bureau of Economic Analysis said on Thursday that the Personal Consumption Expenditures (PCE) index surged 3.8% in the 12 months through April, the biggest jump since May 2023. The March PCE inflation rate was revised to 3.5%. Excluding the volatile food and energy components, the core PCE price index rose 3.3% in April from a year earlier, up from 3.2% in March. The Federal Reserve uses the PCE inflation index as its reference for the 2% inflation target. Financial markets expect the Fed to keep the benchmark interest rate in the range of 3.50% to 3.75% until 2027.