US consumer resilience keeps PCE in focus
The US Bureau of Economic Analysis is due to publish April personal income and spending figures, with the PCE price index the main focus for investors. The release matters because PCE is the Federal Reserve's preferred inflation gauge, and the market is already alert to the risk that price pressure is becoming harder to contain.
Consensus expectations point to a 0.4% monthly rise in personal income and a 0.5% increase in spending. If those forecasts are met, the source argues that US consumers would still be spending faster than incomes are rising, helped by the wealth effect from higher equity markets and by relatively strong spending from wealthier Baby Boomers.
Source: BEA and FRED via CMC Markets, 27 May 2026
PCE could move back towards 4%
The key inflation question is whether PCE is moving back towards the 4% area. The Spanish source notes that consensus expects headline PCE to rise to 3.8% year on year and core PCE to reach 3.3%, broadly in line with the Cleveland Fed's nowcast.
The more uncomfortable point is that the nowcast points to a further acceleration in May, with CPI potentially reaching 4.18% and PCE 4.06%. If inflation breaks above 4% without a meaningful fall in energy prices, the source argues that the Fed may have to tighten policy again rather than simply keep rates high for longer.
