WS #15134
The US Core PCE inflation index fell to 3.0% year-over-year, marking a significant cooling from the previous 3.3% and beating consensus estimates. This data, combined with an upward revision to Q2 GDP growth and a robust ADP jobs report, has convinced markets that the Federal Reserve is likely to hold rates steady or cut in the near term. Consequently, the 10-year Treasury yield dropped 5 basis points to 5.205%, and equity futures turned positive, reversing earlier losses. This shift marks a critical pivot from inflation anxiety to growth-and-rate stability.
US Inflation & Macro Pivot
The US Core PCE inflation index fell to 3.0% year-over-year, marking a significant cooling from the previous 3.3% and beating consensus estimates. This data, combined with an upward revision to Q2 GDP growth and a robust ADP jobs report, has convinced markets that the Federal Reserve is likely to hold rates steady or cut in the near term. Consequently, the 10-year Treasury yield dropped 5 basis points to 5.205%, and equity futures turned positive, reversing earlier losses. This shift marks a critical pivot from inflation anxiety to growth-and-rate stability.