Personal consumption expenditure price index reaches a new high in 3 years, suspense of Fed rate hike this year at its peak.

In January of this year, President Trump nominated Kevin Warsh to be the chairman of the Federal Reserve, hoping that the latter would respond to his calls for interest rate cuts. One month later, the sudden changes in the situation in the Middle East disrupted the established path: the conditions that were expected to support the Federal Reserve's interest rate cut are now gradually fading away. "The reasons for the Federal Reserve to cut interest rates are becoming fewer and fewer," analysts lamented. For the current Federal Reserve, inflation is undoubtedly a major concern. The latest data shows that the US personal consumption expenditure price index in May rose to a three-year high. As the energy supply shocks triggered by the Middle East geopolitical conflict gradually diminish, the Federal Reserve may enter an observation period for inflation assessment. Whether US inflation can gradually decline in the future will become a key consideration for future policy decisions. After the release of the above PCE data, traders slightly reduced their bets on a rate hike by the Federal Reserve. However, overall, the market still expects the Federal Reserve to decide on a rate hike at the earliest in the September meeting.