Fed Delays Rate Hike Until December Amid Lower Inflation Reading
The Federal Reserve's preferred inflation gauge came in lower than expected, indicating that interest rates may not be raised until December.
The core PCE price index, which excludes volatile food and energy prices, rose 0.2% over the month at a 3% annual rate, according to the Bureau of Economic Analysis. This was below estimates of a 0.3% monthly pace and a 3.3% yearly rate.
Economists had been expecting a dip in the monthly inflation reading due to changes in data collection methodology. However, it's unclear how much of the change is from the methodological tweak versus actual price softening.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, noted that while inflation came in lower, it still remains far above the Fed's 2% goal. He also pointed out that another batch of data showed the job market and economic growth remaining resilient.