We still expect that the Fed's preferred core PCED inflation measure will fall to the Fed's 2.0% target by the end of this year (chart). It was already down to 2.8% y/y in April. May's number will be released on Friday, and should show further progress.
![](https://www.yardeniquicktakes.com/content/images/2024/06/gateway-92.png)
We don't see the Fed cutting the federal funds rate (FFR) this year, which should keep the 10-year yield above 4.00% in the second half of 2024. Here's our take on the latest relevant developments and Fedspeak:
(1) Rent inflation. Rent inflation continued to moderate through May in the CPI (chart). It should do the same in May's PCED report on Friday.
![](https://www.yardeniquicktakes.com/content/images/2024/06/gateway---2024-06-26T122834.193.png)