
Inflation sticks around as Growth Outlook Brightens for Q3
U.S. inflation remained above the Fed’s 2% target in July, with the PCE price index up 3.7% year over year and core PCE at 3.3%, while spending cooled modestly and incomes rose faster than prices. BEA data showed durable goods orders rebound and corporate profits surge, and second-quarter GDP growth was left at 1.5% but with consumption revised up to 3.4% and private sales strengthening to 4.2%, signaling stronger private demand and a possible ~3% pace for Q3. The mixed signals keep the Fed focused on inflation, with markets pricing about a 40% chance of a rate hike in September as tariffs and geopolitical tensions continue to influence price pressures ahead of Jackson Hole.











