Analysis: The core inflation indicator favored by the Federal Reserve in April is expected to improve.

The core inflation measure favored by the Federal Reserve may fall to its lowest level since 2021 in the data for April. Economists at Pantheon Macroeconomics and Capital Economics estimate that the core PCE annual rate, excluding volatile food and energy prices, could drop from 2.6% in March to 2.5% in April. This would be the lowest level since March 2021, just before the inflation surge truly began during the pandemic.