Fed’s preferred gauge showed core inflation at 3.0% in August, much lighter than expected
The personal consumption expenditures price index was projected to show an annual gain of 3.7% on headline and 3.3% for core, according to the Dow Jones consensus. However, core inflation came in at 3.0% in August.
The US Dollar and Treasury yields retreated as traders trimmed bets on another Federal Reserve interest-rate hike in October following less hawkish remarks from New York Fed President John Williams. Markets now see a 43% chance of an October rate hike, down from around 70% earlier in the week.
Economists had expected the core PCE Price Index to rise 0.3% month-on-month in August, up from 0.2% in July, with headline PCE inflation forecast to rise 0.4% month-on-month.
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