Overview

• Commerce Department data for August PCE, the Fed’s preferred gauge, is due Friday just days after policymakers trimmed the federal funds rate to 4.00%–4.25%.
• July’s PCE index rose 2.6% year over year, with core at 2.9%, while the CPI stood at 2.9% for the same period.
• Argus forecasts largely steady August readings at 2.8% for headline PCE and 3.0% for core.
• Analysts caution that persistent inflation in services such as transportation and shelter, along with tariff pass-through, complicates progress toward 2%.
• Argus’s composite of 20 inflation indicators averages about 2.7% year over year, and BEA data show Q2 real GDP growth revised up to a 3.8% annualized pace.