US Inflation Rate Slows, Boosting Hopes for Delayed Fed Rate Hike

The US inflation report for August showed a lower-than-expected reading of 3.4% on an annual basis, boosting hopes that the Federal Reserve might not raise interest rates as soon as next month.

The Commerce Department's personal consumption expenditures (PCE) price index was lower than economists' estimates of 3.7%, according to data compiled by Reuters.

The report also showed a solid growth in the US economy, driven by robust consumer spending and business investment related to AI infrastructure.

As a result, traders now see a roughly 35% chance of an October rate hike, down from about 45% previously.