U.S. Core Pce Price Index

The Core PCE Price Index in the US, measures the personal consumption expenditures (PCE) prices excluding food and energy prices. The core PCE price index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices to reveal underlying inflation trends. Higher than expected or rising figures for the Core PCE Index reflects inflationary pressures in the economy and are supportive and positive for the US Dollar, as the Fed may increase in the future the key interest rate to fight the inflation rate.
The core PCE is the Fed’s preferred inflation measure, having a target rate of 2.0%. The latest figure for the Core PCE Price Index on a yearly basis was 1.5%, marginally higher than the previous reading of 1.4%, but still lower than the target rate of 2.0% set by the Fed, signaling that there are not any significant inflationary pressure in the US economy. This may weigh on the future interest rate increases and a sustained low figure for the Core PCE Price Index can influence potentially negatively the US Dollar, leading to lower than expected interest rate increases in year 2018.