August Inflation Data Softens Pressure for October Fed Rate Hike
US inflation cooled in August, according to data released by the Bureau of Economic Analysis. The core personal consumption expenditures price index rose just 0.2% from July, below the 0.3% increase forecasted by economists.
This softer-than-expected reading could reduce pressure on policymakers to raise interest rates at their October meeting. Core PCE inflation stood at 3.0% compared to a year earlier, still above the Fed's 2% target but lower than expected.
The US Federal Reserve has made clear that its next decisions will depend heavily on incoming economic data. With this new information, officials now have another reason to consider waiting before raising rates again.
New York Fed President John Williams suggested there may not be an urgent need to increase rates in October.