Fed's Preferred Inflation Gauge Shows Cooling, Boosting Rate Cut Hopes

Key inflation metrics indicate easing price pressures, prompting expectations of significant interest rate cuts by the Federal Reserve.

The core Personal Consumption Expenditures (PCE) index rose just 0.1% month-over-month in August, below Wall Street forecasts.
Year-over-year, the core PCE index increased by 2.7%, aligning with expectations but still above the Fed's 2% target.
The likelihood of a 50 basis point rate cut in November has increased to 54%, according to the CME FedWatch Tool.
Economists predict US inflation will hit the Fed's 2% goal by early 2025, with further rate cuts expected through 2025 and 2026.
Stock markets responded positively, with the S&P 500 hitting its 42nd record high this year and the Dow Jones Industrial Average rising.