The U.S. Core Personal Consumption Expenditures (PCE) price index, a key inflation gauge, rose by 0.1% in August, falling short of the expected 0.2%. This deceleration signals that inflationary pressures are cooling, following a 0.2% increase in July. With inflation slowing, the Federal Reserve may reconsider its stance on aggressive rate hikes, potentially opening the door for future rate cuts. The moderation in price growth, combined with softer-than-expected income and spending figures, boosts hopes for more accommodative monetary policy ahead.
Key Highlights:
Inflation cooling increases likelihood of rate cuts.
Fed may pause further hikes to prevent slowing economic growth.
