Grab EXTRA 10% OFF all Tangem products. Till Oct 25US PCE inflation cools, easing rate hike expectations
4.9 Macro US PCE inflation rose 3.4% in August, below forecasts. Core inflation was 3%. Markets now see lower odds of an October rate hike, and the dollar weakened.
US PCE inflation rose 3.4% year-on-year in August, coming in below analysts’ forecasts. Core inflation increased 0.2% month-on-month, with an annual reading of 3.0%, also lower than expected. These figures, combined with the Federal Reserve’s signals of no urgency to raise interest rates, reduced the likelihood of a rate hike in October. Market participants shifted their expectations for a possible hike to December instead. Wall Street futures gained and Treasury yields declined in response. EUR/USD held modest gains, supported by a weaker US dollar and lower bond yields. Despite moderating inflation, the rate remains above the Fed’s 2% target, and the resilient US economy keeps the risk of higher rates for longer on the table.
