The Personal Consumption Expenditures Price Index, a measure of inflation the Fed puts considerable weight upon,, declined for the first time since November 2020, from a 40 year high of 6.6% in March, to 6.3% in April. Meanwhile the Core PCE, which eliminates food and energy costs to account for less expensive substitutions in necessary expenditures, rose only slightly higher, 0.3%, in April. These were the smallest increases since last summer, giving investors hope inflation might be abating somewhat.

When looked at over the last year, the Core Inflation rate slowed to 4.9%, from 5.2%. That would be the second straight decline, a feat not seen since the first few months of the pandemic.

The Fed places particular emphasis on the PCE, and especially the Core PCE, as it feels it is the most accurate measure of inflation in the economy. Investors are hopeful this measure’s decline might indicate the Fed may not need to tighter the monetary supply as aggressively as has been anticipated, and this might reduce any recessionary risks going forward.