Friday that showed inflation in August approached the Federal Reserve’s objective, clearing the path for additional interest rate reductions.
The cost of goods and services in the American economy is gauged by the Fed using the personal consumption expenditures price index, which increased by 0.1% in July. This brings the 12-month inflation rate down to 2.2%, the lowest since February 2021.
All-items PCE was expected to increase 2.3% from a year ago and by 0.1% from the previous month.
Core PCE increased by 0.1% in August and by 2.7% year over year, with the 12-month figure being 0.1 percentage points higher than July, when food and energy were excluded.
As a more accurate indicator of long-term trends, Fed officials frequently concentrate more on the core. Both 2.7% and 0.2% were predicted for core, respectively.
The managing director of trading and investment at E-Trade from Morgan Stanley, Chris Larkin, stated, “Everything is quiet on the inflation front.”
“To the collection of economic data that has reached a sweet spot, add the PCE Price Index for today. Despite the possibility that economic growth is decreasing, inflation is still a serious problem.
Source (CNBC)
