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Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, stayed unchanged at 0.6% on a monthly basis in April, the US Bureau of Economic Analysis reported on Friday. This reading came in higher than the market expectation of 0.2%. On a yearly basis, the PCE Price Index rose to 3.6% from 2.4%, compared to analysts’ estimate of 2.2%.

More importantly, the annual Core PCE Price Index, the Federal Reserve’s preferred gauge of inflation, jumped to 3.1% from 1.9% and surpassed the market consensus of 2.9%.  

Market reaction

The initial market reaction to this report was largely muted and the US Dollar Index was last seen gaining 0.36% on the day at 90.33.