Sticky US Inflation Pressures Ahead: What the August PCE Report Means for Markets

The US Personal Consumption Expenditures (PCE) price index for August will be released on September 30, and market expectations suggest sticky inflation pressures.

Economists polled by Bloomberg expect headline PCE to rise 0.5% month-on-month in August, up from 0.4% in July, while core PCE is expected to increase 0.3% month-on-month, also up from 0.2% in July.

The main drivers of pressure on the August PCE are rebounding energy prices and sticky core services inflation, particularly in housing, healthcare, insurance, and certain consumer services prices.

If the August core PCE reaches or exceeds 0.3%, it could reinforce market expectations of 'higher for longer' interest rates, making a Fed rate hike in October more likely.