US soft landing hopes increase as Fed's preferred inflation measure holds steady at 2.5% in July

Consumer confidence ticks up

The US Federal Reserve's preferred method for measuring inflation, personal consumption expenditures (PCE), stood unchanged at 2.5% in July, according to data from the Bureau of Economic Analysis, paving the way for the central bank to cut rates on 18 September.

Similarly, core PCE – which excludes food and energy prices – was 2.6%, remaining unchanged for the third month in a row. The latest figures released today (30 August) signalled more accommodating conditions for a potential Fed rate cut in September, which markets are widely anticipating. US inflation dips below 3% for the first time since 2021 The central bank's chair Jerome Powell said "the time has come for policy to adjust" last week at the Jackson Hole summit, confirming markets' current expectations. Greg Wilensky, head of US fixed income at Janus Henderson, said PCE infla...