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0.0% <br />1.0% <br />2.0% <br />3.0% <br />4.0% <br />5.0% <br />6.0% <br />7.0% <br />8.0% <br />Personal Consumption Expenditures (PCE) <br />PCE Price Deflator YOY % <br />Change <br />PCE Core Deflator YOY % <br />Change <br />Fed Target <br />YO <br />Y <br /> <br />( <br />% <br />) <br /> <br />C <br />h <br />a <br />n <br />g <br />e <br />0.0% <br />1.0% <br />2.0% <br />3.0% <br />4.0% <br />5.0% <br />6.0% <br />7.0% <br />8.0% <br />9.0% <br />10.0% <br />Consumer Price Index (CPI) <br />CPI YOY % Change <br />Core CPI YOY % <br />Change <br />YO <br />Y <br /> <br />( <br />% <br />) <br /> <br />C <br />h <br />a <br />n <br />g <br />e <br />Inflation decelerated sharply in June, with the Consumer Price Index falling 0.4%on the month—its largest decline since the onset of the <br />pandemic in 2020—and bringing the annual rate down to 3.5% from 4.2%in May. Core CPI (excluding food and energy) was flat on the <br />month and rose 2.6% year over year, both coming in softer than expected after energy-driven pressures pushed inflation to a three-year <br />high earlier in the quarter. The CPI report suggests at least a near-term reprieve in inflation. However, the latest available Personal <br />Consumption Expenditures (PCE) price index tells a firmer story: headline PCE rose 0.4%in May and 4.1% year over year,up from 3.8%in <br />April and marking the highest annual rate of the current cycle. Core PCE increased 0.3%on the month and 3.4% over the year. Energy prices <br />remained the primary driver of recent headline acceleration, reflecting supply disruptions tied to the Iranian conflict, although price <br />volatility remains elevated. <br />Source: US Department of Labor Source: US Department of Commerce <br />INFLATION <br />7 <br />Page 177 of 373