US Inflation Climbs as Consumers Spent More in May

Summary

Bloomberg anchors react to the May PCE report showing core PCE at 3.4% y/y and headline at 4.1% y/y. A slight downside miss on the monthly headline figure triggered a brief bond rally and equity jump, though the hosts caution the early move. They discuss stubborn inflation drivers, a hawkish Fed outlook, and surprisingly strong consumer income and spending.

• May core PCE rose 3.4% y/y, headline hit 4.1% y/y, both multi‑year highs.
• Monthly headline PCE slightly below expectations, triggering two‑year yield drops and equity futures gains.
• S&P 500 added 0.8% and Nasdaq 100 jumped 2.4% in the immediate reaction.
• Personal income surged 0.7% m/m and real spending rose 0.3%, beating forecasts.
• Anchors warn the early market reaction may not hold.
• Energy, AI, services, and rental inflation keep the overall inflation picture hawkish.
• The data reinforces expectations that the Fed will remain hawkish with PCE still far above target.