US Inflation Rises to 3.7%, Sticky Core Prices Keep Markets on High Alert

The US Personal Consumption Expenditures (PCE) Price Index for July rose 3.7% year over year, slightly above market expectations and well above the Federal Reserve's 2% inflation target.

Core PCE, which excludes food and energy prices, increased 0.2% month over month and 3.3% year over year, broadly in line with market expectations.

The stickiness of services inflation could continue to slow the pace of overall disinflation, as services prices rose 0.3% during the month and remained the primary driver of overall inflation.