Core PCE inflation (Thursday, 08:30 ET) is expected 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.
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",says Standard Chartered.