An article summarized by CNBC:
U.S. inflation rose slightly in July, with the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) price index, increasing 0.2% for the month and 3.7% from a year earlier. Both readings were slightly hotter than economists expected. Core PCE, which excludes volatile food and energy prices, rose 0.2% monthly and 3.3% annually, matching forecasts but remaining well above the Fed’s 2% inflation target.
Consumer spending and income also increased, with personal income rising 0.4% and spending up 0.2%. Goods prices actually fell 0.1%, helped by a 2.7% drop in gasoline and energy-related goods, while services prices increased 0.3%, driven partly by financial services, insurance and housing. The report initially pushed Treasury yields higher and weighed somewhat on stock-market futures.
The data come as the Fed considers its next move on interest rates. Markets currently see only about a one-in-three chance of a rate change at the September 15–16 meeting, with a potential rate hike viewed as more likely later in the year. Meanwhile, Treasury yields have climbed to their highest levels since 2007, reflecting concerns about persistent inflation, federal deficits and the government’s growing debt burden. Fed officials are also gathering in Jackson Hole, where Chairman Kevin Warsh is scheduled to deliver a closely watched policy speech Friday.
