U.S. PCE inflation rose less than expected, favoring October Fed rate pause

  • PCE inflation rose less than expected in August, supporting an October rate pause.
  • Private payrolls data exceeded expectations on the same day.
  • Federal Reserve officials faced mixed signals ahead of the October policy meeting.

The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose less than expected in August, strengthening the case for a rate pause at the October policy meeting. Stronger-than-anticipated private payrolls data released the same day provided a countervailing signal for policymakers.

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