The Fed's Preferred Inflation Metric Came in Cooler Than Expected. Here's What That Means for Interest Rates This Year

The August PCE inflation index came in cooler than expected at 3.4%, unchanged from July. This cooler-than-anticipated reading significantly reduced market expectations for a Fed rate hike in October from 70% to just 37%. While stocks showed modest gains on the news, the market remains focused on multiple factors including upcoming employment and CPI data.