If the core PCE price index drops to 2.6% in May as expected, the following effects may occur:

Enhance expectations of interest rate cuts: The market may believe that the Fed is more likely to cut interest rates in the future. Because the easing of inflationary pressure provides more room for interest rate cuts to further stimulate economic growth, this may lead to selling pressure on the US dollar, which will be bullish for assets such as gold, silver, non-US currencies and US stocks.

Impact on consumers: To a certain extent, it means that the actual purchasing power of consumers has increased relatively, and the rate of increase in consumer costs has slowed down, which may encourage consumers to increase spending, thereby having a positive impact on economic growth.