The Federal Reserve’s preferred measure of inflation is expected to slow further in May, adding to evidence from the consumer and producer price indices that inflation in the US has begun to ease after stagnating for months.

The personal consumption expenditures index published on Friday is forecast to have risen at an annual rate of 2.6 per cent, down from 2.7 per cent in April, according to economists surveyed by Bloomberg. The core measure, which strips out the volatile food and energy sectors and is most closely watched by the Fed, is expected to be 2.6 per cent, down from the 2.8 per cent.

The PCE data will follow encouraging consumer price figures earlier this month, which showed that inflation fell to 3.3 per cent in May. Investors are now betting on multiple interest rate cuts this year, even after the Fed’s own forecasts showed a single cut by December.