US Core PCE Inflation Likely Rises to 2.9% in July, Keeping Fed in Spotlight
The US core PCE inflation, the Federal Reserve’s favorite gauge, is expected to rise 2.9% year-over-year in July, compared to 2.8% in June. This would be the fastest pace since early 2024, showing that inflation is still sticky despite slower growth in other parts of the economy.
This report is very important because it comes just weeks before the Fed’s big September 16–17 policy meeting. Traders are watching closely to see if inflation data will push the Fed to delay or move ahead with a rate cut.
Right now, markets are heavily betting on a 25-basis-point rate cut in September, with odds above 85%. Weak job numbers and recent dovish comments from Fed officials are keeping those expectations alive. However, if inflation stays firm at 2.9% or higher, the central bank may be more cautious about cutting too soon.
Overall, the data will decide whether the Fed sticks with its easing outlook or takes a slower path. Until then, both the US dollar and gold prices are likely to see sharp reactions around the release.
Impact:
A stronger PCE reading may boost the US dollar and limit rate cut hopes, while a softer print could weaken the dollar and support gold.
