#PCEInflationWatch Personal consumption expenditures (PCE) inflation, the Federal Reserve's preferred gauge of inflation, was unchanged in July, according to a Commerce Department report released Thursday. This suggests that the US economy may be responding to the Fed's aggressive interest rate hikes. The headline PCE price index, which includes food and energy prices, was unchanged in July after rising 0.2% 📈 in June. In the 12 months through July, the headline PCE price index rose 3.3%📈, unchanged from June. The core PCE price index, which excludes volatile food and energy prices, rose 0.2%📈 in July after rising 0.3%📈 in June. In the 12 months through July, the core PCE price index rose 4.2%, unchanged from June. Although PCE inflation was stable in July, the Federal Reserve is not complacent. At its July policy meeting, the Fed raised interest rates by 0.25 percentage points to a range of 5.25% to 5.50%. The Fed has raised interest rates 11 times since March 2022 in an effort to cool the economy and reduce inflation. The Fed has indicated that it could raise interest rates again this year if inflation does not fall to the 2% target. Financial markets are awaiting the release of the August jobs report on Friday. The jobs report will be an important indicator of the health of the US economy. If the jobs report is strong, it could give the Fed more room to raise interest rates again this year.
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