April Core PCE and the GDP Revision: Kevin Warsh's First Inflation Test

On Thursday 28 May 2026, two first-tier US data points will be released: the April reading of core PCE, the Federal Reserve's preferred inflation gauge, and the second estimate of first-quarter GDP. It is the first major inflation print since Kevin Warsh took over as Federal Reserve Chair from Jerome Powell, and it lands with the 10-year Treasury yield already near a one-year high. This single session could clarify the inflation-versus-growth picture that has unsettled markets through May.

TL;DR

• April core PCE and the second estimate of Q1 GDP both release on Thursday 28 May at 8:30am EDT

• It is the first major inflation reading since Kevin Warsh took over as Fed Chair from Jerome Powell.

• March core PCE was 3.2% year-on-year, and the Q1 GDP advance estimate showed 2.0% annualised growth.

• The 10-year US Treasury yield sits near a one-year high above 4.59%, and markets have priced out 2026 rate cuts.

• US markets are closed Monday 25 May for Memorial Day, shortening the trading week.

• A weekend drone strike near a UAE nuclear plant kept an energy-price risk premium in markets.

The Latest Updates 

US inflation data has run warm through the spring. April producer prices rose at close to their fastest pace in four years, and the April consumer prices report pointed to broadening price pressures, leading traders to price out Federal Reserve rate cuts for 2026. Against that backdrop, US equities retreated into the close of the previous week. The S&P 500 fell 1.24% on Friday, 15 May 2026, to settle at 7,408.50, and the index slipped a further 0.07% on Monday, 18 May, while the Nasdaq Composite eased to 26,090.73. (Source: Yahoo Finance)

The move in bonds has been the larger story. The 10-year US Treasury yield climbed above 4.595% on Monday, 18 May, a one-year high. Higher long-end yields tend to weigh on highly valued technology shares, and the US Dollar Index advanced to around 99, its strongest level since early April. Gold, which pays no yield, declined as the dollar and yields firmed, settling near $4,548 per ounce on Friday, 15 May 2026, its lowest in over a week.

Geopolitics has kept an energy-price risk premium in place. Over the weekend, a drone strike caused a fire in a generator outside the inner secure zone of the Barakah nuclear plant, the UAE's only nuclear facility, with no injuries or radiological impact reported. Brent crude held above $110 a barrel as US-Iran negotiations continued without a clear resolution.

Why a new Fed Chair raises the stakes

The 28 May inflation reading is the first to land since Kevin Warsh was confirmed as the 17th Chair of the Federal Reserve. The Senate approved him on 13 May, and his term began when Jerome Powell's term as Chair expired on 15 May. Powell has chosen to remain on the Board of Governors, so he keeps a vote on the rate-setting committee. As reported by CNBC, Warsh takes the seat vacated by Governor Stephen Miran rather than Powell's, meaning the balance between policy hawks and doves does not shift mechanically with the handover.

The Federal Reserve held its target range at 3.50% to 3.75% at the 28-29 April meeting, the third consecutive hold, in an 8-4 vote. Markets have since priced out rate cuts for 2026, and pricing for a possible 25 basis point hike later in 2026 has firmed. Warsh's early communication will be read closely ahead of the 16-17 June FOMC meeting, and the 28 May data is likely to shape it.

What to watch this week

The trading week is shortened. US markets are closed on Monday, 25 May for the Memorial Day holiday, and the data calendar is concentrated later in the week.

• Tuesday 26 May: The Conference Board's consumer confidence index, an early read on household sentiment before the inflation data.

• Thursday 28 May, 8:30am EDT: April Personal Income and Outlays, which contains core PCE and headline PCE. March core PCE was 3.2% year-on-year and headline PCE was 3.5%.

• Thursday 28 May, 8:30am EDT: The second estimate of first-quarter GDP, with corporate profits. The advance estimate showed the economy grew at a 2.0% annualised rate, up from 0.5% in the fourth quarter of 2025.

• Thursday 28 May, 8:30am EDT: Weekly initial jobless claims, a current gauge of the labour market.

The spending and personal income details in the same report will also show whether households are still spending as energy costs stay elevated.

How the data could read across markets

The releases feed several markets at once. The clearest channel runs through interest rate expectations and the Treasury curve, where the long end already sits at one-year highs. A firmer core PCE reading could see markets add to hike expectations, while a softer reading could prompt some to revisit the case for a later move. Both outcomes are possible, and markets may move in either direction.

For the US dollar, higher-for-longer rate pricing has tended to lend support, which is part of why the US Dollar Index has firmed. The euro and the yen are the common expressions of that move. For equities, higher long-end yields may compress valuations on high-multiple technology shares, the channel behind the recent pullback in the S&P 500 and Nasdaq Composite. For gold, a non-yielding asset, the reaction to real yields and the dollar is the key transmission.

Conclusion

The 28 May session brings inflation and growth data together, and it does so under new Federal Reserve leadership and with the bond market already positioned for firmer inflation. Whether the numbers confirm or challenge that positioning, the week ahead is likely to keep rate expectations, the dollar, equities and gold closely linked.

*Past performance does not guarantee future results. The above is for marketing and general informational purposes only, and are only projections and should not be taken as investment research, investment advice or a personal recommendation.