Overview

• BEA data showed PCE rose 0.3% in August for a 2.7% annual rate, while core PCE increased 0.2% on the month and 2.9% year over year, matching forecasts.
• Personal spending climbed 0.6% and personal income rose 0.4% in August, both slightly above expectations and consistent with resilient consumption.
• Stocks and futures advanced, Treasury yields eased, and the dollar slipped after the release, reflecting confidence that further Fed easing remains likely.
• Policymakers, who trimmed rates by 25 basis points on Sept. 17 to 4.00%–4.25% following signs of labor softening, are watching upcoming reports after Q2 growth was revised up to 3.8%.
• Tariff-related pressures are starting to surface in goods prices but pass-through remains limited for now, leaving the inflation trajectory sensitive to further duties and sticky services costs.