The annual update of US PCE is "significant," giving slight advantage to the reason for no rate hike this year.

The inflation index valued by the Federal Reserve is about to be adjusted. Even though this change may not fundamentally alter the overall inflation pattern, it may be enough to slightly strengthen the reasons for not raising interest rates this year. This is the initial judgment made by economists on the annual update of the Personal Consumption Expenditures Price Index scheduled to be released by the US Bureau of Economic Analysis in September. Several economists suggest that if the planned adjustments have been applied to the latest data, the core inflation rate may be lowered by around 0.1 to close to 0.3 percentage points. The Personal Consumption Expenditures Price Index rose by 4.1% year-on-year in May, the largest increase since April 2023, far exceeding the Federal Reserve's target of 2%. The core PCE, a key indicator weighted more heavily by decision-makers as it excludes the more volatile food and energy prices, rose by 3.4%.