US Inflation Below Expectations as Economy Remains Resilient

The US personal consumption expenditures price index rose by 0.3% in August from the previous month, leading to an annual increase of 3.4%. This is lower than economists' forecasts of a 0.3% and 3.7% increase, respectively.

The core PCE inflation rate, which excludes food and energy prices, also rose by 0.2% in August, with an annual rate of 3%. Economists had expected a 0.3% and 3.3% increase, respectively.

New York Fed President John Williams said he sees 'no urgency' for further policy action after the inflation data was released. As a result, markets are pricing in a lower chance of an October rate hike, down from 70% to around 51.5%, according to CME's FedWatch Tool.