📊 Core PCE Remains Stubbornly Above Target

The Fed's preferred inflation gauge isn't giving policymakers much relief.

🔹 July Core PCE rose 0.25% m/m, equivalent to an annualized pace of ~3.0%.

🔹 The 12-month Core PCE rate held at 3.34%, well above the Fed's 2% target.

🔹 On an annualized basis:

• 3-month Core PCE: 3.0% • 6-month Core PCE: 3.5%

Looking under the hood:

🏠 Housing: +0.26% m/m, +3.2% y/y 🛍️ Core Goods: +0.15% m/m, +2.3% y/y 💼 Core Services ex-Housing (the Fed's key focus): +0.28% m/m, +3.8% y/y

The biggest challenge remains services inflation. While goods prices continue to show moderate pressure, services inflation is proving far stickier and remains the main obstacle to a return toward the Fed's 2% objective.

📈 The trend suggests inflation is no longer accelerating aggressively, but progress toward target has largely stalled. Three-month and six-month annualized measures continue to run around 3%-3.5%, indicating underlying price pressures remain elevated.

For markets, this report reinforces the idea that the Federal Reserve may need to keep policy restrictive for longer unless upcoming labor market and inflation data show a more meaningful cooling.

Key takeaway: Inflation isn't spiraling higher, but it also isn't falling fast enough to comfortably justify a dovish Fed pivot.

🎯 Make sure to follow me for more market breaking news and analysis.

#PCE #Inflation #FederalReserve #Fed #Economy #Markets #Macro #Investing #Stocks #InterestRates #FinancialMarkets 📉🏦🇺🇸