Inflation continues to burn in the United States: the Fed’s preferred index was released, which is the one that the US central bank, currently led by Jerome Powell, closely monitors to guide its monetary policy decisions.
This is the core PCE index which, on a monthly basis, rose by 0.6% in August, more than the + 0.5% expected, significantly accelerating the pace compared to + 0.1% in July.
Year-on-year, the core PCE jumped 4.9%, more than the estimated + 4.7%, compared to the 4.6% rise the previous month.
The headline PCE index, on the other hand, slowed down, growing in August at an annual rate of 6.2%, less than + 6.4% in July.
On a monthly basis, however, the PCE index has flared up, reporting a trend of + 0.3%, compared to the previous decline of 0.1%.
US stock indices worsened, with futures turning red after the numbers came out, rekindling fears of new rate hikes of at least 75 basis points by the Federal Reserve.
Last week, Jerome Powell’s Fed made its third consecutive monetary tightening of 75 basis points, taking US fed funds rates to a record since 2008, in the range of 3% to 3.25%, in order to to defuse runaway inflation.