US inflation cools in August, reducing Fed rate hike expectations

inflation report PCE index interest rates Wall Street Treasury yields

U.S. economic data released on Wednesday showed cooling inflation and resilient growth, leading to mixed performance on Wall Street. The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, rose 3.4% annually in August, falling below the 3.7% economists had anticipated. Core PCE, which excludes food and energy, rose 3% annually, also lower than the expected 3.3%.

Despite the softer inflation data, Treasury yields remained elevated. The 10-year Treasury yield climbed above 5.30%, its highest level since 2002, while the 30-year yield reached 5.64%. This bond market pressure contributed to a mixed close for major indexes: the Dow Jones Industrial Average fell 0.86% to 50,906.05, and the S&P 500 dropped 0.25% to 7,651.54. Conversely, the tech-heavy Nasdaq Composite rose 0.24% to 26,861.06.

Economic resilience was further evidenced by a revised GDP growth rate of 2.2% for the second quarter, up from a previous 1.5% estimate, and private sector employment which added 90,000 jobs in September, exceeding market expectations. The cooler inflation report has significantly reduced market expectations for a Federal Reserve interest rate hike in October, with probabilities falling to approximately 35-39%.

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Alphabet · Alphabet Inc. · CME Group · Dow Jones Industrial Average · Euro · European Central Bank · Federal Reserve · France · Friedrich Merz · Germany · John Williams · Nasdaq

Claims

What the coverage asserts, and how many sources carry each claim.

[● 4 SOURCES] U.S. second-quarter GDP growth was revised upward to 2.2% annually. www.fxstreet.cz · www.altonivel.com.mx · www.breitbart.com
[● 8 SOURCES] The August inflation rate was lower than the 3.7% expected by economists. www.europesays.com · www.fool.com · www.watoday.com.au · www.ibtimes.com · www.altonivel.com.mx · +1 more
[○ 1 SOURCE] Alphabet shares rose approximately 3.1% following an AI accord with the White House. www.fool.com
[● 14 SOURCES] U.S. consumer prices rose 3.4% year-on-year in August. www.europesays.com · www.fool.com · www.watoday.com.au · www.ibtimes.com · www.altonivel.com.mx · +6 more
[● 4 SOURCES] Core PCE rose 0.2% in August, below the 0.3% expected. www.fool.com · www.ibtimes.com · zpravy.kurzy.cz · www.breitbart.com
[DISPUTED] Traders now see a 35% chance of a Federal Reserve interest rate hike next month. www.europesays.com · www.watoday.com.au · www.fxstreet.cz
[○ 1 SOURCE] Private payrolls increased by 90,000 in August. www.ibtimes.com
[● 13 SOURCES] The monthly PCE price index increased by 0.3% in August. timesng.com · www.ibtimes.com · www.breitbart.com · www.europesays.com · www.sbctv.gr · +6 more
[● 7 SOURCES] Annual core PCE rose to 3% in August. www.fool.com · www.ibtimes.com · www.breitbart.com · timesng.com · zpravy.kurzy.cz · +2 more
[● 2 SOURCES] The Dow Jones fell 0.86% to 50,908 points, while the Nasdaq rose 0.24% to 26,861 points. www.sofokleousin.gr · www.ibtimes.com
[● 2 SOURCES] The private sector added 90,000 jobs in September, indicating a slowing labor market. www.sbctv.gr · www.borsagundem.com.tr
[● 5 SOURCES] The Personal Consumption Expenditures (PCE) index rose 3.4% annually in August, lower than the 3.7% forecast. www.sofokleousin.gr · www.europesays.com · www.watoday.com.au · yournews.com · timesng.com