PCE Inflation Holds Steady at 3.7%, Defying Expectations

The Personal Consumption Expenditures (PCE) price gauge, used by the Federal Reserve to measure inflation, remained at 3.7% in July, beating expectations and highlighting ongoing price pressures for households.

Forecasts from FactSet had predicted a 3.6% annual gain, but the actual figure was unchanged from June.

The PCE index tracks what U.S. consumers pay for goods and services, and the Fed closely monitors it when setting borrowing costs.

Inflation has moderated since peaking in May, but it still runs far above the central bank's 2% target.