A forecast suggests that the inflation rate in the April PCE report, due May 31st, may slow down slightly, potentially paving the way for the Federal Reserve to cut interest rates by the end of the year. Meanwhile, forecasts also indicate a slowdown in the growth of consumer income and spending in April, indicating a weakening economic momentum. Many forecasters believe that the Fed will begin cutting interest rates in November or December to alleviate the pressure of rising loan rates across various categories.

A survey suggests that CPI in April is expected to rise by 0.3% compared to March, with an annual growth rate of 2.7%. If the data aligns with expectations, it would help alleviate concerns stemming from the unexpected increase in inflation in the first quarter. In particular, core inflation, which excludes food and energy prices, is expected to rise by only 0.2%, a slowdown from March's 0.3%. Fed officials are particularly concerned about core inflation as it is a broader indicator of inflation trends and directly influences the setting of various loan rates.

Since July last year, the Fed has kept benchmark interest rates at their highest level since 2001 to curb inflation. They have been waiting for signs of price growth falling back to an annual rate of 2% before considering lowering benchmark interest rates.

Economists at Deutsche Bank pointed out in a research report that if the PCE report meets expectations, the Fed may begin cutting interest rates at its December meeting. Although the possibility of an earlier rate cut exists, it would require a series of more favorable inflation data as well as weakness in labor market or economic growth data.

Compared to Deutsche Bank, financial markets are more optimistic about the timing of rate cuts. As of May 28, traders believe there is a 55% chance of a rate cut in November.

The report will also include consumer spending and income data, which may also influence rate decisions and serve as indicators of the financial health of American households. Additionally, personal income growth in April will reach 0.3%, lower than the previous month's 0.5%, while spending growth will be 0.4%, only half of March's 0.8%.