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On Friday new inflation data was released that showed the core personal consumption expenditures price index increased 0.1% for the month and was up 2.6% from a year earlier. The highly anticipated print, which exposes price changes passed on to consumers, was in line with expectations and will help the Fed make its next monetary policy decision. May marked the lowest annual increase in over three years, which means the central bank is getting closer to achieving the price stabilization portion of its dual mandate.

Since the Fed is also meant to promote maximum employment, the dual mandate certainly requires a balancing act. Although the economy has withstood the ‘higher for longer’ environment well, unemployment, which hovers around 4%, has slowly started to increase. Monetary policy is aimed at slowing growth just enough to reduce inflation without initiating a recession, which is a challenging feat. It’s up to the Fed to decide when the economy has had enough, and while the data is promising, the path forward remains uncertain.