The Federal Reserve’s preferred inflation index jumped by 6.8% in June, marking the highest annual gain in four decades. This data arrives only days after the Fed raised interest rates for the fourth time this year to bring down record inflation.

On Friday, the Commerce Department released its latest data for the Personal Consumption and Expenditure Index (PCE) and found that the increase was the highest since January 1982. On a month-to-month basis, the index rose by 1% between in June, the largest monthly gain since February 1981.

The PCE index, which does not include more volatile food and energy prices among its basket of goods, is a preferred metric used by the Fed for gaining a better understanding of core inflation. This latest PCE data adds to the hot inflation numbers that emerged from June.

According to government data, the Consumer Price Index (CPI) rose 9.1% that month while the Producer Price Index (PPI) shot up to 11.3% Together, these readings showed that inflation was continuing to rise and fester, and likely influenced the Fed into hiking rates again earlier this week.

On July 27, the Fed instituted a rate hike of 0.75 percentage points. The size of the hike was the same as the one implemented in June, but the central bank acknowledged for the first time that its hawkish strategy appeared to be slowing the economy without adversely affecting employment levels.

Following the latest rate hike, Powell said that the goal remained avoiding a recession and restoring price stability. Powell said to do so may necessitate reducing growth to help correct the supply and demand imbalances that are fueling much of the inflation in the U.S. economy.

“We actually think we need a period of growth below potential in order to create some slack so that the supply side can catch up. We also think that there will be, in all likelihood, some softening in labor-market conditions,” Powell remarked at a press conference.

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