Fed’s Inflation Measure Falls More Than Expected

The PCE price index—the Fed’s go-to inflation metric—dropped to 2.2% in August, surprising economists who predicted a 2.3% rise! This is great news as it suggests inflation is cooling down faster than expected. 🥳💰

With inflation falling, the Fed could cut rates again in November, after already lowering them by 0.5% last week for the first time since the pandemic. Economists are split on whether the next cut will be 0.25% or another 0.5%. 📉🔮

Despite core inflation holding at 2.7%, market reactions were quick: the US dollar slipped, while the S&P 500 and Nasdaq Composite gained slightly, with rate-sensitive stocks performing well! 📈💵

As we gear up for the 2024 presidential election, the economy is taking center stage. Inflation is easing, but how will this impact the Fed’s next moves? 🗳️