August PCE Sticky, Fed Split on Cuts

The August Personal Consumption Expenditures report showed headline PCE +0.3% month‑over‑month and 2.7% year‑over‑year, while core PCE remained sticky at 2.9% year‑over‑year, readings that largely matched expectations and remain above the Fed’s 2% target. Many officials said part of the recent rise—partly linked to tariffs—appears contained or one‑off. The report left the Fed divided between officials who favor front‑loading rate cuts and others willing to hold policy, making the timing of future easing dependent on upcoming jobs and activity data. Markets reacted calmly, with investors broadly reassured, while persistent inflation differentials and central‑bank responses will continue to influence currency trends and exchange‑rate moves.