Key Facts
• Federal Reserve reassured by minimal inflation impact from Trump-era tariffs.
• April PCE Price Index to be released on May 30, core index expected to rise 0.1%.
• March core PCE index showed no change.
• Economists predict tariff effects on April inflation data to be minor but more evident in May.
• Labor market shows no significant stress, supporting steady interest rates.
• Fed to release FOMC meeting minutes from May 6-7 on May 28.
• Fed Chair Powell to speak at Princeton University on May 25.
• U.S. economic growth expected to slow throughout 2025 due to cautious corporate outlooks.
• April PCE slowdown reflects reduced household spending and rising economic concerns.
• Economists suggest Fed likely to maintain current rates despite inflation and spending slowdown.
• Key U.S. data releases this week include durable goods orders (May 27) and Q1 GDP revision (May 29).
• Global updates: China’s industrial profits (May 27) and Tokyo CPI (May 30).
• New Zealand and South Korea central banks expected to cut rates by 0.25% this week.
Summary
The Federal Reserve is expected to maintain steady interest rates as inflation remains subdued, with minimal impact from Trump-era tariffs. The April PCE Price Index, set for release on May 30, is projected to show a 0.1% rise in the core index, following no change in March. Economists anticipate more pronounced tariff effects in May data. Despite slowing household spending and economic growth, the labor market remains stable, supporting the Fed’s cautious approach. Key U.S. economic indicators, including durable goods orders and Q1 GDP revisions, will be released this week. Globally, China’s industrial profits and Tokyo’s CPI are also in focus. Central banks in New Zealand and South Korea are expected to lower rates by 0.25%.
