Fed still on track for more interest rate cuts as US core inflation holds at 2.9%

Core inflation stayed stuck at 2.9% in August, according to the Federal Reserve’s go-to forecast ￰0￱ data, released Friday by the Commerce Department, makes it clear the Fed is still heading toward another interest rate cut, likely within the next few ￰1￱ personal consumption expenditures (PCE) price index went up 0.3% last month, pushing the overall yearly inflation rate to 2.7%. That’s a small bump from July’s 2.6%, while the core rate, which drops food and energy, barely moved, rising 0.2% monthly and holding at 2.9% for the ￰2￱ number lined up exactly with what Wall Street was expecting, based on the Dow Jones ￰3￱ sticks to rate-cut path despite stubborn inflation Even with inflation still above the Fed’s 2% goal, officials aren’t switching ￰4￱ week, policymakers signaled they’re expecting two more quarter-point rate cuts by the end of the ￰5￱ first one already ￰6￱ Federal Open Market Committee approved it just last week, dropping the federal funds rate to a new target range of 4% to 4.25%.

Markets are already pricing in another move for October, but a December cut is still up in the ￰7￱ inflation refuses to cool off fully, spending and income data are also showing signs of ￰8￱ income jumped 0.4% in August, while consumer spending rose even faster at 0.6%. Both of those beat estimates by 0.1 percentage point, showing that Americans are still throwing cash around—even with higher ￰9￱ data also puts a spotlight back on Donald Trump’s ￰10￱ earlier fears, they haven’t done much to push up prices. A lot of firms loaded up on goods before the tariffs kicked in, while others just ate the ￰11￱ ￰12￱ prices haven’t spiked the way people thought they ￰13￱ Chair Jerome Powell and other officials aren’t stressing over the tariffs much.

“They’re likely just a one-time bump in prices,” Powell ￰14￱ some people at the Fed still aren’t buying that. A few are worried there’s not much space left to keep cutting rates without real risk. Still, the consumer seems ￰15￱ with tariffs in place, people are spending like ￰16￱ incomes are helping. That’s likely giving the Fed some cover to stay on its current ￰17￱ crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites