July PCE Inflation Data Surprises Markets, Fed Rate Hike Back on the Table
TLDR
- July PCE inflation came in at 3.7% year over year, hotter than the expected 3.6%
- Core PCE held at 3.3% year over year, in line with June
- Month-over-month headline PCE rose 0.2%, above the expected 0.1%
- Fed officials are divided on whether to raise rates ahead of the Jackson Hole symposium
- Fed Chair Kevin Warsh will speak Friday, with analysts expecting no hints on September rate plans
The Bureau of Economic Analysis released its July personal consumption expenditures price index on Wednesday. Headline PCE came in at 3.7% year over year, matching June’s pace but above the 3.6% economists had forecast.
BREAKING: US July PCE inflation, the Fed's preferred inflation metric, hits 3.7%, above expectations of 3.6%.
Core PCE inflation was 3.3%, the second highest reading since October 2024.
US inflation continues to run at nearly double the Fed's 2.0% target.
Own assets or be left…
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On a month-over-month basis, headline PCE rose 0.2%. That was stronger than the 0.1% rise expected and a sharp reversal from June’s 0.1% decline.
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