Key inflation metric trending below the Fed's 2% target

Published On Aug 31, 2024, 6:00 AM

A key inflation metric, the core Personal Consumption Expenditures (PCE) index, has fallen back below the Federal Reserve's 2% target, showing an annualized inflation rate of 1.8%. This indicates a potential easing in inflation pressures, which could lead to more flexibility for the Fed in future interest rate decisions, particularly as the labor market shows signs of cooling. The situation suggests a more stable economic environment compared to previous high inflation periods, creating cautious optimism for the near future.