Bonds & Rates
Home›Bonds & Rates›Economy›US PCE inflation cools, odds of October Fed hike drop
US PCE inflation cools, odds of October Fed hike drop
The Commerce Department reported August PCE inflation at 3.4% year over year, below 3.7% estimates, while traders cut the probability of an October rate hike to about 35% from about 45%.
Good economic news in the latest US inflation reading boosted Wall Street on Wednesday, with traders lowering expectations for an early Federal Reserve rate increase, according to the Guardian Economics. A Commerce Department report showed the personal consumption expenditures, or PCE, price index rose 3.4% year over year in August, compared with 3.7% estimates from economists polled by Reuters.
Separate data also pointed to continued economic momentum, with second-quarter GDP showing growth driven by consumer spending and business investment tied to AI infrastructure buildout, the outlet said. As a result, the probability traders assigned to an October rate hike fell to about 35%, down from about 45% after White House pressure, Guardian Economics reported.