According to Jin Shi data reports, market analyst Matt Grossman stated that the inflation indicator favored by the Federal Reserve failed to converge towards the 2% target level in July, highlighting the policy challenges the Fed faces as it prepares for a possible interest rate cut in September. Data from the U.S. Bureau of Economic Analysis shows that the year-on-year PCE price index in July increased by 2.6%, unchanged from the previous month. The core PCE price index rose by 2.9% year-on-year in July, up from 2.8% in June. This reading has been widely anticipated, as economists can very accurately predict PCE inflation using other official data released earlier this month.
Although some of the price increases driven by tariffs continue to exceed the target level, Federal Reserve Chairman Powell previously hinted that, considering the cooling labor market, the Fed is considering making its first interest rate cut of the year in September.