WS #15146
The US core PCE inflation rate for August registered at 3.0%, a substantial drop from the 3.3% consensus forecast. This cooler data has immediately dampened market fears of persistent inflation, driving down Fed rate-hike probabilities to 35% and sparking a broad rally in risk assets. The dollar weakened against major currencies as traders repriced the Federal Reserve's policy path, while equity indices opened higher on the prospect of easier monetary conditions.
US Inflation & Fed Policy
The US core PCE inflation rate for August registered at 3.0%, a substantial drop from the 3.3% consensus forecast. This cooler data has immediately dampened market fears of persistent inflation, driving down Fed rate-hike probabilities to 35% and sparking a broad rally in risk assets. The dollar weakened against major currencies as traders repriced the Federal Reserve's policy path, while equity indices opened higher on the prospect of easier monetary conditions.