Inflation continued to remain tame in June, as evidenced by a key inflation indicator. The Core Personal Consumption Expenditure (PCE), which strips out volatile food and energy, rose 1.6% in June, below the 1.7% expected. The Core PCE is the Fed's favorite inflation gauge and it has set a target range of around 2%. The Fed has said that inflation will continue to run low for several years to come. Inflation can be defined as the overall general upward price movement of goods and services in an economy.
Home price gains continued to cool off in May and have come back down to more sustainable levels. The S&P 20-City Home Price Index rose 2.4% annually in May, down from 2.5% in April and well below the 7% gains seen a year ago. On a national level, the Home Price Index rose 3.4%. On a monthly basis, the 20-City Index rose 0.1%. Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices said, “Among 20 major US city home price indices, the average year-over-year gain has been declining for the past year or so and now stands at the moderate nominal year-over-year rate of 3.1%."
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