U.S. Trimmed Mean and Median PCE Price Indices not as strong as Core PCE
The Dallas Fed’s Trimmed Mean PCE inflation index, which is reported to be a series favored by Fed Chair Kevin Warsh, as well as the Cleveland Fed’s Median PCE price index, look a little less alarming than the Fed’s officially targeted Core PCE price index. This could be used as an argument against tightening by Warsh, though both series are stable significantly above 2.0%.
The core PCE price index increased in May to 3.4% yr/yr and has been trending higher since slipping to 2.6% in April 2025. The Dallas Fed’s Trimmed Mean PCE price index is however showing only marginal signs of acceleration. Yr/yr growth at 2.41%, while up from 2.34% in April, has been running below 2.5% since December. On a one month basis the annualized gain was a little firmer at 2.78% but has not reached 3.0% since August 2025. The 6-month pace of 2.49% is at an 8-month high but the acceleration is moderate since February data touched 2.0%.
The Cleveland Fed’s Median PCE price index is giving a similar message. The monthly pace (in this case not annualized) at 0.29% is the highest since August 2025 but the yr/yr pace of 2.82% is only marginally up from 2.76% in April and has now seen below 3.0% for seven straight months, something that had not been seen since September 2021. This suggests that the acceleration in core PCE prices is quite narrowly based, though how significant this is likely to receive a variety of opinions at the Fed.
