Overview

• In August, the PCE price index rose 0.3% on the month and 2.7% year over year, with core PCE up 0.2% on the month and unchanged at 2.9% annually, all in line with forecasts.
• Personal consumption expenditures increased 0.6% and personal income rose 0.4%, while the saving rate reached 4.6%, signaling resilient consumer demand.
• Equities advanced and Treasury yields were little changed as CME FedWatch probabilities for a 25-basis-point rate cut in October climbed to the mid‑80% range, with odds of a December move also higher.
• The Fed lowered rates by 25 basis points last week to a 4.00%–4.25% target range, and officials cautioned that near‑term inflation risks remain tilted higher even as the labor market softens.
• After fresh White House actions including a 100% duty on branded pharmaceuticals and new tariffs on trucks and cabinets, economists warned that tariff pass‑through could add to price pressures in coming months.