Core PCE inflation may creep up in May

US Personal Consumption Expenditure inflation for May is scheduled to release today.

Standard Chartered estimates, core PCE inflation (Thursday, 08:30 ET) to be up 0.1% m/m, (in line with the consensus view) from 0.1% in April, which would translate in a 1.2% y/y print, unchanged from April. San Francisco Fed President Williams recently said he would like to see underlying inflation - meaning core PCE inflation - bottom out before hiking rates, which probably reflects many FOMC members' views as well, notes Standard Chartered. 

"Core PCE inflation may creep up over the summer (mostly on the back of health-care costs and still-high rent inflation). Stronger personal consumption should also boost the Fed's confidence in the need to start hiking rates. We see May personal spending data up 0.6% m/m (consensus: 0.7%) from 0.0% in April. We forecast Q2 GDP growth of 1.8% q/q SAAR, from -0.2% in Q1", said Standard Chartered in a report on Thursday.