Inflation Inches Up

The Federal Reserve’s preferred measure of inflation increased in line with economist expectations last month (RTTNews).

What’s going on: “The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1% in June after coming in unchanged in May. The uptick by the index matched expectations.”

The annual growth rate of the PCE price index slowed to 2.5% in June from 2.6% in May, according to the Commerce Department. That was also in line with forecasts.

Core PCE: The core PCE price index, which excludes food and energy prices, increased 0.2% in June after increasing 0.1% in May. Economists had expected another 0.1% rise.

The annual growth rate of the core PCE price index stayed the same from May to June, remaining at 2.6%. Economists had predicted a slowdown to 2.5%.

What it could mean: “The CME Group’s FedWatch now suggests just a 7% chance of a rate cut from the Fed next week, but pegs the odds of a quarter point reduction in September … at around 90%” (TheStreet).