Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July

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1. 19d ago

   Core prices rose 3.3% in July as services costs climb

   Core prices increased 3.3% annually in July according to the Federal Reserve's preferred inflation gauge. This elevation reflects ongoing cost struggles for Americans and a 0.3% rise in services prices, which was driven by a 1.2% jump in financial services. While overall US PCE inflation reached 3.7% in July, these figures have not shifted investor expectations for a potential rate hike in September. Market volatility remains high globally, with Indian equities falling amid uncertainty over global interest rates and monthly expiry pressures.

   Why it matters

   The Federal Reserve uses the PCE index to determine monetary policy and interest rate adjustments. Persistent inflation in the services sector often complicates efforts to lower rates. Recent market reactions in India show how global rate uncertainty affects international equity benchmarks.

   What is confirmed

   • Core prices rose 3.3% annually in July according to the Federal Reserve's preferred inflation measure.
   • Overall US PCE inflation rose to 3.7% in July.

   Still unconfirmed

   • Services prices rose 0.3% due to a 1.2% increase in financial services.
   • Median apartment rents increased 0.1% in August as vacancies fell and construction slowed.
   • The S&P BSE Sensex fell 539.35 points to 76,933.59 on Thursday.
   • Best Buy shares fell 7% despite beating Q2 earnings expectations.
   • Iran and Oman reached an agreement to share control and revenues of the Strait of Hormuz.

   What to watch next

   • Federal Reserve interest rate decision during the September meeting
   • Upcoming PCE inflation data for August
   • Further shifts in US apartment vacancy and construction rates
   Sources used for this update (7)

   1. www.osoulmisrmagazine.com — Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July
   2. www.arkansasonline.com — Index shows inflation continuing
   3. theindianawaaz.com — Aug 27: Sensex Tumbles 539 Pts, Nifty Slips Below 24,100 as Expiry Weigh on D-Street
   4. www.economies.com — Oil prices steady after Iran announces revenue-sharing deal with Oman over Strait of Hormuz
   5. www.briefs.co — U.S. Apartment Rents Show First Summer Increase Since 2022
   6. www.briefs.co — Best Buy Beats Q2 Forecasts Despite Stock Decline Amid Economic Concerns
   7. www.thehindubusinessline.com — Sensex today | Stock Market Live: Sensex, Nifty edge higher as investors track crude oil, West Asia cues
   confidence 90%
2. 20d ago

   Core prices rose 3.3% in July according to Fed preferred inflation gauge

   Core prices increased 3.3% annually in July, according to the Federal Reserve's preferred inflation measure. While some reports describe the advance as muted, other data indicates overall US PCE inflation rose to 3.7% in July. This persistent price pressure coincides with a pullback in consumer spending. The data has not significantly altered investor expectations regarding a potential Federal Reserve rate hike during the upcoming September meeting.

   Why it matters

   The Federal Reserve monitors the PCE gauge to determine if interest rate adjustments are necessary to stabilize the economy. Current inflationary pressures are linked to energy costs, ongoing US trade disputes, and a war in Iran.

   What is confirmed

   • Core prices rose 3.3% annually in July according to the Federal Reserve's preferred inflation gauge.
   • Consumer spending decreased in July due to price pressures.

   Still unconfirmed

   • Inflation is elevated due to a war in Iran and US trade fights.

   What to watch next

   • Federal Reserve interest rate decision in September
   • Upcoming Nvidia financial results
   Sources used for this update (8)

   1. Reuters — Wall St futures subdued as Nvidia results, inflation take center stage
   2. CNBC — Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July
   3. CNN — Consumers pulled back on spending in July in the face of continuing price pressures | CNN Business
   4. The New York Times — Inflation Remains Elevated as Energy Costs Push on Prices
   5. AP News — Key inflation gauge remains elevated during Iran war and ongoing US trade fights
   6. Bloomberg — Key US Inflation Gauge Posts Muted Advance, Spending Stalls
   7. www.hindustantimes.com — US inflation rises to 3.7% in July: What it means for Fed rate cuts
   8. www.cnbc.com — Core PCE: In line but not enough to lower Fed rate hike expectations
   confidence 80%