🇺🇸 PCE inflation figures rose 0.3% MoM and 3.4% YoY in August—compared with expectations of 3.7%.
The core inflation rate, excluding food and energy, stands at 0.2% MoM and 3.0% YoY, instead of the expected 3.3%.
At the same time, consumer spending is rising: +0.9% MoM (price-adjusted: +0.6% MoM) and incomes are up +0.2% MoM.
What does this mean for the stock market?
Price pressures are easing, but demand is not. The central bank’s benchmark interest rate directly affects demand. The fact that inflation is slowing while, on a price-adjusted basis, people are buying more suggests that the next interest rate hike is more likely to be delayed than canceled. As a result, the probability of another Fed rate hike on October 28 has fallen to below 50%:
https://www.bea.gov/news/2026/personal-income-and-outlays-august-2026
